<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  ------------
                                    FORM 10-K
                                  ------------
                  (Mark One)

                  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR
                      15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

                      FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
                                      OR
                  [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
                      15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

                      FOR THE TRANSITION PERIOD FROM     TO

                         COMMISSION FILE NUMBER 0-27056

                           HEALTHCARE.COM CORPORATION
             (Exact name of registrant as specified in its charter)

                GEORGIA                                   58-2112366
    (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                    Identification No.)

     1850 PARKWAY PLACE, SUITE 1100                          30067
           MARIETTA, GEORGIA                              (Zip Code)
(Address of principal executive offices)

                                 (770) 423-8450
              (Registrant's telephone number, including area code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      None

       SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                    Common Stock, $0.01 par value per share
           (together with associated preferred stock purchase rights)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

         The aggregate market value of the registrant's Common Stock (based upon
the closing sales price quoted on the Nasdaq National Market) held by
nonaffiliates as of March 20, 2001 was approximately $38,433,013.

         As of March 20, 2001, 28,167,013 shares of the registrant's Common
Stock, par value $0.01 per share (together with associated preferred stock
purchase rights), were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the registrant's definitive Proxy Statement for the 2001
Annual Meeting of Shareholders are incorporated by reference into Part III.


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                                TABLE OF CONTENTS

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                                                                                                               PAGE
                                                                                                              NUMBER
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<S>                                                                                                           <C>
Part I

         Item 1.  Business................................................................................        3

                  Factors That May Affect Future Performance..............................................       11

         Item 2.  Properties..............................................................................       24

         Item 3.  Legal Proceedings.......................................................................       24

         Item 4.  Submission of Matters to a Vote of Security Holders.....................................       24


Part II

         Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters...................       25

         Item 6.  Selected Financial Data.................................................................       26

         Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations...       27

         Item 7A. Quantitative and Qualitative Disclosures About Market Risk..............................       38

         Item 8.  Financial Statements and Supplementary Data.............................................       39

                  Supplementary Financial Information.....................................................       39

         Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure....       40

Part III

         Item 10. Directors and Executive Officers of the Registrant*.....................................       40

                  Executive Officers of the Registrant....................................................       40

         Item 11. Executive Compensation*.................................................................       40

         Item 12. Security Ownership of Certain Beneficial Owners and Management*.........................       40

         Item 13. Certain Relationships and Related Transactions*.........................................       40

Part IV

         Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.........................       41
</TABLE>

*        Incorporated by reference to the Registrant's Proxy Statement for the
         2001 Annual Meeting of Shareholders.


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               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         In addition to historical information, this report includes
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Words such as
"expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and
other similar expressions are intended to identify such forward-looking
statements; however, this report also contains other forward-looking statements
in addition to historical information. The Company cautions that there are
various important factors that could cause actual results to differ materially
from those indicated in the forward-looking statements; accordingly, there can
be no assurance that such indicated results will be realized.

         Among the important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements are: (i) the
intensely competitive online commerce industry (including the impact of
competitive products and pricing), (ii) various factors that may inhibit growth
in the use of the Internet such as the availability and acceptance of the
Internet as a secure medium over which to conduct transactions, (iii) inability
of third parties to provide software that is integrated into our products,
(iv) new product development and resulting market acceptance, (v) failure to
obtain significant subscriber growth, (vi) changes in governmental regulations
applicable to or affecting the Company, its competitors, or its customers,
(vii) long sales cycles, (viii) changes in pricing policies, (ix) undetected
errors or bugs in the software, (x) delays in product development, (xi)
lower-than-expected demand for the Company's software tools or services,
(xii) changes in outsourcing trends involving information technology and
related services, (xiii) the ability to successfully integrate acquired assets
and retain  key personnel, (xiv) business conditions in the healthcare and
other complementary markets (including, but not limited to, access to capital
and the financial condition of providers and e-Health vendors), (xv) copyright
infringement issues and dependence on intellectual property rights, (xvi)
volatility in the company's stock price and low trading volume, (xvii)
variability in quarterly operating results, and (xviii) the risk factors
detailed from time to time in the Company's periodic reports and registration
statements filed with the Securities & Exchange Commission.

         Readers are urged not to rely on such forward-looking statements,
which speak only as of the date hereof. By making such forward-looking
statements, the Company does not undertake a duty to update them in any manner.

         In this Report, the words "Company," "Healthcare.com," "we," "our,"
"ours," and "us" refer to Healthcare.com Corporation and its subsidiaries.
Healthcare.com owns the Cloverleaf(R), EMerge(R) and Solution Sourcing(TM)
trademarks in the United States. Trademarks, trade names or service marks of
other companies appearing elsewhere in this Report are the property of their
respective owners.

                                     PART I

ITEM 1.           BUSINESS

                  Healthcare.com develops and markets enterprise application
integration solutions that provide the distributed infrastructure for data
access, integration, indexing and extension, and offers packaged solutions that
implement and build upon these products. In addition, we offer integration and
Information Technology ("IT") outsourcing services to healthcare enterprises and
healthcare application vendors which allow them to outsource their integration
or IT functions. The majority of the Company's revenue comes from service
offerings. Healthcare.com's customers are focused within the healthcare and
state and local government markets.

         The Company was incorporated in Georgia in June 1994 as Healthdyne
Information Enterprises, Inc. ("HDIE"), a wholly-owned subsidiary of Healthdyne,
Inc., and was initially focused on providing enterprise-wide clinical
information management solutions for integrated healthcare delivery networks. In
November 1995, Healthdyne, Inc. distributed to its shareholders all of the
outstanding shares of HDIE common stock in a spin-off. In October 1997, HDIE
redefined its strategic direction to focus on providing software products and
services to support the enterprise-wide integration of information. In 1998,
HDIE changed its name to


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HIE, Inc. ("HIE"). As part of the strategic focus, HIE (1) acquired HUBLink,
Inc., a privately-held integration software product company, in May 1998 in a
pooling-of-interests transaction and (2) sold assets related to certain
non-strategic consulting services to Superior Consultant Holdings Corporation in
December 1998. On March 13, 2000, the Company signed an agreement, effective as
of February 25, 2000, to purchase certain service contracts and certain
liabilities of the Integrated Solutions Division ("ISD"), a division of Thermo
Information Solutions, Inc. ("Thermo"). ISD, based in Charleston, South
Carolina, designs, implements and manages information technology solutions. On
April 10, 2000, the name of the Company was changed from HIE, Inc. to
Healthcare.com Corporation as part of the Company's introduction of a new
healthcare, business-to-business product strategy to complement and extend its
existing enterprise-wide integration business.

         The Company's reportable segments are strategic business units that
offer different products and services. Beginning January 1, 2000, the
Company operates in two segments: (i) the licensing of integration software
products and performance of related integration services ("Software and
Services") and (ii) services provided by the Company that allow enterprises to
outsource their information technology, integration and application functions
to Healthcare.com ("Solution Sourcing"). Prior to 2000, the Solution Sourcing
business did not separately exist. The significant portion of the Solution
Sourcing business was added upon the acquisition of ISD. See Note 14 in the
Notes to Consolidated Financial Statements for a complete description of
Healthcare.com's reporting segments.

         Healthcare.com sells its software products to distributors and
application vendors, as well as directly to end-users. Software license sales
are comprised of (1) full-use licenses, which provide the end-user with full
functionality of the product and (2) limited use licenses, which restrict the
use of certain functionality of the product or the number of application
interfaces. A typical distributor or application vendor agreement includes an
initial license of software with rights to sublicense, with additional licenses
obtained periodically during the term of the agreement. Sales directly to
end-users are generally for perpetual licenses for a one-time, up-front fee.

         Healthcare.com recognizes revenue from two primary sources, software
licenses and services. Software license revenue is recognized in accordance with
the criteria set forth in Statement of Position ("SOP") 97-2, Software Revenue
Recognition and SOP 98-9 Software Revenue Recognition with Respect to Certain
Transactions issued by the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants and Staff Accounting Bulletin
No. 101, Revenue Recognition in Financial Statements. Accordingly,
Healthcare.com recognizes software license revenue when: (1) persuasive evidence
of an arrangement exists; (2) delivery has occurred; (3) the fee is fixed or
determinable; and (4) collectibility is probable.

         Services revenue includes fees for product implementation and
integration services, outsourcing services including facilities management and
product development, software support and maintenance services and education.
Product implementation and integration services are generally provided under
contracts with terms of less than one year. Revenue is recognized as the work is
performed or, in the case of a fixed-fee contract, on a percentage-of-completion
basis, even though some services may be prepaid. The Company provides customers
the ability to outsource their integration of software, application hosting
and/or their IT facilities management functions. Facilities management
outsourcing arrangements are typically one year or longer for a fixed monthly
fee. Revenue is recognized monthly in accordance with the fixed-fee agreement.
Product development outsourcing arrangements are typically fixed-fee contracts
that are one year or longer for which revenue is recognized on a
percentage-of-completion basis. Software support and maintenance services are
generally provided under one-year renewable service contracts for a prepaid
standard fee. Revenue is recognized ratably on a straight-line basis over the
term of the contract. Education classes are provided for a standard per-student
charge and revenue is recognized as the service is provided.


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         Research and development expenses are accounted for in accordance with
the provisions of the Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 86, "Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed" ("SFAS 86"). SFAS 86 requires
capitalization of certain software development costs subsequent to the
establishment of technological feasibility. Based on Healthcare.com's product
development model, technological feasibility is established upon completion of a
working model.

PRODUCTS AND SERVICES

         The Company's two primary software products are Cloverleaf(R) and
EMerge(R). The Company also released a new product, WebConX, during the fourth
quarter of 2000. In addition, the Company provides services related to its
products, as well as integration outsourcing and full IT facilities management
services.

Cloverleaf

         Cloverleaf, Healthcare.com's interface engine, allows information in
the form of messages, records or transactions to be exchanged, transformed and
routed between disparate applications. Cloverleaf simplifies and accelerates
integration projects in environments with a wide range of applications, message
structures, platforms and legacy technologies. It allows enterprises to create,
maintain, manage and monitor the interfaces they use to facilitate
inter-application communication, helping reduce the amount of time associated
with integration.

         Healthcare.com also offers the Cloverleaf Gateway, a limited-use
version of Cloverleaf designed primarily for independent software vendors
seeking to package selected integration features with their own product. The
Cloverleaf Gateway enables vendors to easily and quickly integrate their
applications with their customers' existing IT environments.

EMerge

         Emerge, Healthcare.com's enterprise-wide master patient index ("EMPI"),
helps healthcare enterprises to integrate person-specific information--such as
demographics, identification numbers and insurance information--across
organizations and information systems. Healthcare information systems typically
have proprietary master person index ("MPI") keys to reference data related to
each person (e.g. a patient record) held in their database. EMerge indexes the
MPIs of multiple, disparate healthcare information systems so that users can
gain access to information on these systems. It identifies and tracks patients
and encounter summaries across the continuum of patient care and offers
front-end and back-end integration capabilities. EMerge also minimizes the
duplication of patient records, improves data access time and allows accurate
linkages of disparate clinical information. EMerge provides process-level
integration and an indexing system applied specifically to the healthcare
industry. As of December 31, 2000, EMerge was installed in approximately 25
healthcare locations.

         Healthcare.com is currently at EMerge release level 3.7 and expects to
release updates or new versions during 2001.


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WebConX

         WebConX was designed to address the need to bring data from existing,
incompatible systems to a browser-based application or website. WebConX
facilitates real-time transactions between back-end legacy systems and Web
application servers, providing Web developers with a toolkit to use in linking
their Web applications to legacy systems. Its integration services provide the
power for Web applications to get instant access to legacy data and also allow
the creation of consolidated, browser-based views of information residing in
multiple, disparate information systems.

Healthcare.com Product-Related Services

         Healthcare.com offers comprehensive integration design, implementation,
maintenance and education services related to all Healthcare.com products. Our
service line includes offerings in implementation; long-term, on-site and
off-site integration management and short-term assistance for time-critical,
highly complex integration projects. In addition to its integration and system
administration services, Healthcare.com provides its customers with
comprehensive training and 24 hours per day and 7 days per week technical
support for its products via telephone, electronic mail and its web site.

Healthcare.com Packaged Solutions

         Healthcare.com has created packages that combine our products and
services into solutions designed to solve specific business problems, such as:

         -        Facilitating integrated, real-time patient insurance
                  eligibility verification for the Integrated Delivery Network;

         -        Integrating the healthcare enterprise's materials management
                  system to its chosen e-commerce hub;

         -        Extending and consolidating legacy clinical data drawn from
                  incompatible applications, like lab, radiology and admissions,
                  to new browser-based applications; and

         -        Consolidating and automating the range of processes found in
                  today's major retirement systems into a single, unified
                  application interface.

         These packaged solutions work in combination with the enterprise's
existing applications.

Healthcare.com SolutionSourcing Services

         Our SolutionSourcing division takes on responsibility for an
enterprises' integration function or entire data center. Healthcare.com works
with clients to create customized menus of services that allow the flexibility
and control a customer needs to meet current and future IT obligations.

         INTEGRATION SOURCING allows the client organization, whether integrated
         healthcare delivery network or vendor, to outsource its integration
         functions to Healthcare.com. With Integration


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         Sourcing, Healthcare.com assumes management and personnel roles, asset
         arrangements for hardware within the integration function, software
         upgrades, interface development, documentation and maintenance of
         interfaces and around-the-clock monitoring and support.

         APPLICATION SOURCING gives healthcare institutions and vendors the
         ability to outsource the hosting of their applications, or use
         Healthcare.com's applications via an Application Service Provider.

         FACILITIES SOURCING gives institutions the ability to fully outsource
         their computing operations to Healthcare.com. Some of the services
         included under facilities sourcing are:

         -- Information Technology ("IT") consulting and strategic planning;
         -- Systems integration;
         -- Network design and management;
         -- Software development;
         -- Hardware procurement;
         -- Data and voice communications;
         -- IT training and education;
         -- Project management; and
         -- IT support and maintenance

CUSTOMERS

         Healthcare.com has two primary target customers: the healthcare
enterprise (which may be a large hospital, integrated delivery network or other
healthcare-delivery entity) and the healthcare software vendor. An enterprise is
either a single entity with multiple departments or multiple entities that are
joined together to fulfill a common mission. For example, a hospital, which has
laboratory, radiology, pharmacy and other departments, is an enterprise; an
integrated healthcare delivery network, which consists of hospitals, clinics,
imaging centers, physicians, home healthcare providers, management service
organizations, employers, payors and others, is also an enterprise. The
healthcare software vendor is in the business of developing software products
for the healthcare industry. Its products offer solutions to a healthcare
enterprise problem, and must be integrated into the healthcare enterprise's
existing information systems infrastructure.

         Since its inception in 1994, Healthcare.com has focused on providing
products and services to customers in the healthcare market, and substantially
all of Healthcare.com's revenue comes from customers in the healthcare market.
Healthcare.com's products are currently available to customers in versions
specifically designed to meet the needs of companies in the healthcare and
financial industries. Healthcare.com also offers products and services designed
for state retirement systems, as well as for the various criminal justice
systems in the United States. While over 95% of Healthcare.com's revenues in
2000 were generated within the United States, Healthcare.com has customers in
several countries worldwide.

         Individually, two end-user customers exceeded 10% of the Company's
total revenue during 2000. Together, these two customers represented 33% of
total revenue and 54% of service revenue during 2000. No single end-user
customer accounted for more than 10% of the Company's revenue in 1999 or 1998.

         Approximately $6.7 million (35% of the gross accounts receivable
balance at December 31, 2000) of the Company's accounts receivable is due from
four customers. The two customers noted in the preceding paragraph are two of
these four customers.

         Approximately 1%, 7% and 35% of Healthcare.com's total revenue in 2000,
1999 and 1998, respectively, were generated by third-party distributors of its
products. During fiscal 1998, distributors accounted for approximately 80% of
Healthcare.com's software sales, and one distributor, McKessonHBOC, accounted
for approximately 40% of Healthcare.com's software license revenue and
approximately 18% of Healthcare.com's total revenue.


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                  See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Backlog" regarding information about
backlog orders.

SALES AND MARKETING

         Healthcare.com sells its products and services primarily through its
direct sales force. In addition, many healthcare application vendors incorporate
our technology into their own products, sublicense our technology, or use our
products within their implementation service offerings. As of December 31, 2000,
Healthcare.com employed a total of 32 individuals in its direct sales force.
Healthcare.com's sales people are located throughout the United States.

         Healthcare.com's typical healthcare sales cycle is between three and
nine months.

         Healthcare.com conducts extensive marketing programs including direct
mail, media relations, user group and partnership relations, advertising and
trade shows. Healthcare.com also sponsors an annual user conference that
provides it with the opportunity to exchange information with its customers on
Healthcare.com's products and trends in the industry. As of December 31, 2000,
Healthcare.com employed a total of six individuals in marketing.

RESEARCH AND DEVELOPMENT

         Healthcare.com has made substantial investments in Enterprise
Application Integration ("EAI") technology through product development and
acquisition. Healthcare.com spent $5.7 million, $5.3 million and $5.1 million on
research and development activities during 2000, 1999 and 1998, respectively.
Its product suite has evolved from message brokers first produced by
predecessors as early as 1991. As of December 31, 2000, Healthcare.com had a
development staff of 53. Healthcare.com categorizes its product development
management into three coordinated groups:

         Research. This group is responsible for researching emerging
technologies and developing prototypes for future products.

         Message Broker. This group is responsible for the development,
integration and quality engineering of the Cloverleaf Integration Engine,
Cloverleaf OM3 components and other message brokering products.

         Indexing. This group is responsible for Healthcare.com's healthcare
processware product, EMerge, which is an indexing product for persons and
insurance and care providers.

COMPETITION

         The market for Healthcare.com's products is intensely competitive and
is expected to become increasingly competitive as current competitors expand
their product offerings and new competitors enter the market. Healthcare.com's
current competitors include a number of companies offering one or more solutions
to the application integration problem, some of which are directly competitive
with Healthcare.com's products.

         Healthcare.com faces competition for product sales and services from a
number of sources, including the following:


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         -        "in-house" IT departments of potential customers or
                  distributors

         -        other vendors offering EAI software directly competitive with
                  our products, such as SeeBeyond Technology Corporation

         -        other vendors offering EMPI software directly competitive with
                  our products, such as SeeBeyond Technology Corporation,
                  Madison Technologies, Inc. and various HIS vendors

         -        systems integrators and professional service organizations and
                  consultants

         -        other vendors of software that address only certain technology
                  components of EAI solutions

         Many of these companies have longer operating histories, significantly
greater financial, technical, marketing and other resources, significantly
greater name recognition, and a larger installed base of customers than
Healthcare.com. Many of these competitors also may have well-established
relationships with Healthcare.com's current and potential customers in our
targeted markets. In addition, many of these competitors have extensive
knowledge of EAI and may be in a better position than Healthcare.com to devote
significant resources toward the development, promotion and sale of products.

         Healthcare.com believes that the principal competitive factors
affecting its market include product features such as heterogeneous computing
platforms, responsiveness to customer needs, scaleability, adaptability, support
of a broad range of functionality, performance, ease of use, quality, price and
availability of professional services for product implementation, customer
service and support, effectiveness of sales and marketing efforts, and company
and product reputation. Although Healthcare.com believes that it currently
competes favorably with respect to such factors, there can be no assurance that
it can maintain its competitive position against current and potential
competitors, especially those with greater financial, marketing, service,
support, technical and other resources than Healthcare.com.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

         Healthcare.com's success and ability to compete are dependent in part
upon its proprietary technology. Healthcare.com relies on a combination of
patent, copyright, trademark and trade secret laws, as well as confidentiality
agreements and licensing arrangements, to establish and protect its proprietary
rights. Despite Healthcare.com's efforts to protect its proprietary rights,
existing patent, copyright, trademark and trade secret laws afford only limited
protection. Moreover, the laws of certain countries do not protect
Healthcare.com's proprietary rights to the same extent as do the laws of the
United States. In addition, attempts may be made to copy or reverse engineer
aspects of Healthcare.com's products or to obtain and use information that
Healthcare.com regards as proprietary. Accordingly, there can be no assurance
that Healthcare.com will be able to protect its proprietary rights against
unauthorized third-party copying or use, which could materially and adversely
affect Healthcare.com's business, financial condition or results of operations.
Moreover, there can be no assurance that others will not develop products that
infringe Healthcare.com's proprietary rights, or that are similar or superior


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to those developed by Healthcare.com. Policing the unauthorized use of
Healthcare.com's products is difficult and litigation may be necessary in the
future to enforce Healthcare.com's intellectual property rights, to protect
Healthcare.com's trade secrets or to determine the validity and scope of the
proprietary rights of others. Such litigation could result in substantial costs
and diversion of resources and could have a material adverse effect on
Healthcare.com's business, financial condition or results of operations.

         There can be no assurance that third parties will not claim
infringement by Healthcare.com with respect to current or future products.
Healthcare.com expects that EAI software developers will increasingly be subject
to infringement claims as the number of products in different industry segments
overlap. In addition, there can be no assurance that legal action claiming
patent infringement will not be commenced against Healthcare.com, or that
Healthcare.com would necessarily prevail in such litigation given the complex
technical issues and inherent uncertainties in patent litigation. In the event a
patent claim against Healthcare.com was successful or Healthcare.com could not
obtain a license on acceptable terms or license a substitute technology or
redesign to avoid infringement, Healthcare.com's business, financial condition
and results of operations would be materially adversely affected.

EMPLOYEES

         As of December 31, 2000, Healthcare.com employed 375 persons. Of these
employees, 38 were engaged in sales and marketing, 248 were in services, 53 were
in research and development and 36 were in general and administrative functions.
None of these employees are represented by a labor union or subject to any
collective bargaining agreement, and Healthcare.com has experienced no work
stoppages. Management believes that its relationship with its employees is good
and that the future success of Healthcare.com depends in large part on its
ability to attract and retain qualified personnel.


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                   FACTORS THAT MAY AFFECT FUTURE PERFORMANCE

         In addition to other factors and matters discussed elsewhere herein,
factors that, in the view of Healthcare.com, could cause actual results to
differ materially from those discussed in forward-looking statements are set
forth below. All forward-looking statements attributable to Healthcare.com or
persons acting on our behalf are expressly qualified in their entirety by the
following cautionary statements.

OUR OPERATING RESULTS VARY SIGNIFICANTLY AND OUR PAST OPERATING RESULTS MAY NOT
BE INDICATIVE OF OUR FUTURE PERFORMANCE

         Historically, the Company had not achieved year over year revenue
growth. You should not use our past results to predict future operating margins
and results. Additionally, we have a limited operating history upon which you
can base your evaluation of our business and prospects. With exception of 1996,
1998 and 2000, we experienced a history of losses and we have not yet been
consistently profitable on an annual basis. At December 31, 2000, we had an
accumulated deficit of approximately $26.9 million. Our future operating results
will depend on many factors, including the following general market conditions,
business factors, government regulations and Intellectual Property:

General Market Conditions:

         -        business conditions in the healthcare and other markets,
                  including, but not limited to access to capital and the
                  financial condition of health care providers and healthcare
                  software vendors

         -        the effects of global economic conditions on capital
                  expenditures for software

         -        the growth of the EAI software market

         -        the growth of demand for our Emerge Product

         -        changes in outsourcing trends involving information and
                  technology services

         -        the impact of the Internet on the healthcare industry ,
                  including various factors that may inhibit the growth in the
                  use of the Internet, including, but not limited to, the
                  availability and acceptance of the Internet as a secure medium
                  over which to conduct transactions, the intensely competitive
                  online commerce industry and the impact of competitive
                  products and pricing

         -        volatility in the Company's stock price and historically low
                  trading volume

Business Factors:

         -        dependence on a limited number of products

         -        the mix of lower margin services revenue and higher margin
                  licensing revenue

         -        new product development and resulting market acceptance of the
                  Company's products

         -        undetected errors or bugs in the Company's software


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         -        delays in product development

         -        unavailability of third party software that is incorporated
                  into our products

         -        our dependence on sales to significant customers and
                  distributors

         -        variability in quarterly operating results due to seasonal
                  fluctuations and other market conditions

         -        our dependence on the healthcare and financial/banking markets

         -        failure to obtain significant subscriber growth in our
                  e-commerce products

         -        the amount and timing of service revenues and the collection
                  of related accounts receivable

         -        the size and timing of orders for our products and the
                  collection of related accounts receivable

         -        lower than expected demand for the Company's software tools or
                  services

         -        long sales cycles for our products and services

         -        changes in pricing policies for our products and services and
                  those of our competitors

         -        the amount, availability and timing of expenditures relating
                  to expansion of our business

         -        potential delay in implementation at customer sites

         -        introduction of new products and enhancements by us or our
                  competitors and the resulting market acceptance of the
                  Company's products

         -        the ability to integrate the operations and assets of acquired
                  businesses, including the retention of key employees and
                  contracts associated with such acquisitions

         -        ability to recruit qualified sales, technical and support
                  personnel

         -        risks associated with international operations, including
                  difficulties in establishing and managing international
                  distribution channels, modifying software for use in foreign
                  markets, enforcing intellectual property rights, fluctuations
                  in the value of foreign currencies, changes in duties and
                  quotas, introduction of tariff or no-tariff barriers and
                  economic, political and regulatory changes

         -        material costs may be incurred in connection with product
                  liability claims

         -        certain events could result in our being delisted from Nasdaq,
                  which could affect our ability to raise funds


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Government Regulations and Intellectual Property:

         -        changes in government regulations applicable to or affecting
                  the Company, including but not limited to the Health Insurance
                  Portability and Accountability Act of 1996 ("HIPAA") and
                  potential regulation by the FDA

         -        the impact of government reimbursement changes on the
                  Company's customers, including, but not limited to the
                  Balanced Budget Act of 1997

         -        copyright infringement issues and dependence on intellectual
                  property rights; our success may depend on our ability to
                  protect our proprietary technology and intellectual property
                  infringement claims can be costly and result in the loss of
                  significant rights

Certain of these risk factors are discussed in more detail below, however,
failure to discuss a risk factor in detail does not diminish its potential
impact of the operations and financial results of the Company.

THERE CAN BE NO ASSURANCES THAT THE COMPANY WILL SUSTAIN THE GROWTH RATE AND
INCREASES IN PROFITABILITY OF YEAR 2000 IN FUTURE PERIODS.

         Prior to 2000, excluding 1996 and 1998, we experienced a history of
losses, and, while the Company was profitable in 2000, 1998 and 1996, we have
not yet been consistently profitable on an annual basis. We believe this is
primarily due to the fluctuation in the percentage of lower margin service
revenue and higher margin software licensing revenue. Unless we are able to
sustain the increases in software licensing revenue from sales of our existing
Cloverleaf and Emerge products, as well as develop and market new enhancements
and new products, our lower-margin service business may dominate our overall
revenue composition. If this occurs, and we are unable to make cost cutting
measures, including improvements to the gross profit of the service business,
the Company may experience reduced profits and/or losses.

FACTORS AFFECTING FLUCTUATIONS IN OUR QUARTERLY RESULTS

         Our quarterly operating results have fluctuated significantly in the
past and may vary significantly in the future. Quarterly revenue and operating
results depend upon, among other things, the volume and timing of customer
contracts and service orders received, as well as the amount of each contract
that we are able to recognize as revenue. These factors are difficult to
forecast. In addition, as is common in the software industry, a significant
portion of our license revenue in a given quarter historically has been recorded
in the last month of that quarter. Our expense levels for each quarter, however,
are based primarily on our estimates of future revenue and are largely fixed. As
a result, we may be unable to adjust spending rapidly enough to compensate for
any unexpected revenue shortfall. Any significant shortfall in revenue in
relation to our planned expenditures would seriously harm our business,
financial condition and results of operations.


                                       13
<PAGE>   14

Our Dependence On Sales To Significant Customers and Distributors May Impact Our
Quarterly Results

         Sales of our products and services to a small number of significant
customers and distributors may account for a significant amount of revenue for a
particular quarter. Individually, two end-user customers exceeded 10% of the
Company's total revenue during 2000. Together, these two customers represented
33% of total revenue and 54% of service revenue during 2000. The accounts
receivable balance from these two customers combined was approximately $3.2
million on December 31, 2000. No single end-user customer accounted for more
than 10% of the Company's revenue in 1999 or 1998. Our significant customers and
distributors may not purchase significant amounts (or any) of our products or
services in a particular quarter. Further, the absence of significant customers
or the changes or delays in distributor orders in the future may cause
significant variability in our revenue for any particular quarter.

Collection Of Accounts Receivable May Impact Our Quarterly Results

         A downturn in the software market, the healthcare market or the market
in general or other financial problems of significant customers could affect our
ability to collect outstanding accounts receivable. We have been required to
establish a reserve against a significant accounts receivable balance in the
past. Our accounts receivable, minus an allowance for doubtful accounts of $5.3
million, were approximately $13.9 million on December 31, 2000. Also, four
customers make up approximately 35% of our gross accounts receivable balance at
December 31, 2000. A delay in collection or uncollectibility of a significant
customer's balance could harm our liquidity and working capital position.

Seasonality May Impact Our Quarterly Results

         Our operating results have also experienced certain seasonal
fluctuations. Historically, our revenue has been higher in the fourth quarter
and lower in the first quarter of each year. We believe that our seasonality is
due in part to the calendar year budgeting cycles of many of our customers and
our incentive compensation policies, which tend to reward our sales personnel
for achieving annual rather than quarterly revenue quotas. In future periods, we
expect that these seasonal trends may continue to cause first quarter license
revenue to decrease from the level achieved in the preceding quarter.

         As a result of these and other factors, our quarterly revenue may
fluctuate significantly, and we cannot predict with certainty our quarterly
revenue and operating results. Further, we believe that period-to-period
comparisons of our operating results are not necessarily a meaningful indication
of future performance. It is likely that in one or more future quarters our
results may fall below the expectations of securities analysts and investors. If
this occurs, the trading price of our common stock would likely decline.

OUR REVENUE IS PRIMARILY GENERATED IN THE HEALTHCARE MARKET

         Substantially all of our revenue comes from customers in the healthcare
market. Sales to healthcare organizations and healthcare application vendors
accounted for substantially all of our


                                       14
<PAGE>   15

total revenue for the years ended December 31, 2000, 1999 and 1998. As a result,
our business, financial condition and results of operations are influenced by
conditions affecting these industries. Our customers and distributors may not
continue to purchase our products and services. Consequently, our failure to
maintain our relationships with our current customers and distributors or to add
new customers or distributors that make significant purchases of our products
and services would seriously harm our business, financial condition and results
of operations.

         Many healthcare organizations are consolidating to create integrated
healthcare delivery systems with greater market power. These organizations may
try to use their market power to negotiate price reductions for our applications
and services. As the healthcare industry consolidates, competition for customers
will become more intense and the importance of acquiring each customer will
become greater. If we were forced to reduce prices for our products or services,
our operating results would suffer.

         The healthcare market itself is highly regulated and is subject to
changing political, economic and regulatory influences. These factors affect the
purchasing practices and operations of healthcare organizations. Changes in
current healthcare financing and reimbursement systems, such as modifications
which may be required by the Health Insurance Portability and Accountability
Act of 1996 ("HIPAA"), could cause us to make unplanned enhancements of software
applications or services or result in delays or cancellations of orders or in
the revocation of endorsement of our applications and services by healthcare
participants. Federal and state legislatures have periodically considered
programs to reform or amend the U.S. healthcare system at both the federal and
state level. These programs may contain proposals to increase governmental
involvement in healthcare, lower reimbursement rates or otherwise change the
environment in which healthcare market participants operate. Healthcare market
participants may respond by reducing their investments or postponing investment
decisions, including investments in our applications and services. We do not
know what effect any proposals would have on our business. See "--Government
Regulation Could Adversely Affect Our Business."

OUR SOFTWARE LICENSE REVENUE IS SUBSTANTIALLY DEPENDENT ON TWO PRODUCTS

         Approximately 75% of our software revenue in 2000 was derived from
licenses of our Cloverleaf products and approximately 25% of our software
revenue was derived from licenses of our Emerge products. Substantially all of
our software license revenue in 1998 and approximately 90% of our software
license revenue in 1999 was derived from licenses of our Cloverleaf products.
Our future success will depend on continued market acceptance of our Cloverleaf
products and enhancements to this product. Competition, technological change or
other factors could reduce demand for, or market acceptance of, our Cloverleaf
products. A decline in demand for our Cloverleaf products would seriously harm
our business, financial condition and results of operations. To date, EMerge has
only a limited sales history upon which you can base your evaluation of its
prospects. If we are unable to achieve significant sales of our software
products, the composition of our revenue may be dominated by our lower-margin
services business, which may contribute to reduced profits and/or losses.


                                       15
<PAGE>   16

WE DEPEND ON SERVICES REVENUE

         Services revenue represented a majority of our total revenue for 2000,
1999, and 1998. We anticipate that services revenue will continue to account for
a substantial amount of our total revenue for the foreseeable future.

         -        Because services revenue has lower gross margins than software
                  license revenue, an increase in the percentage of total
                  revenue represented by services revenue or an unexpected
                  decrease in software license revenue could have a detrimental
                  effect on our overall gross profit and our operating results

         -        We subcontract certain product implementation, customer
                  support and training services to third-party service
                  providers. Revenue from these third-party service providers
                  generally carries lower gross margins than our service
                  business overall; as a result, our services revenue and
                  related margins may vary from period to period, depending on
                  the mix of revenue from third-party service providers

         -        Services revenue depends in part on ongoing renewals of
                  support contracts by our customers, some of which may not
                  renew their support contracts

         -        45% of our service revenue from 2000 was derived from long-
                  term service contracts relating to our Solution Sourcing
                  agreements. In the event that one of these long-term service
                  contracts is terminated or is not renewed, our service revenue
                  will be reduced materially and such termination or failure to
                  renew will materially affect our operating results.

         If our services revenue is lower than anticipated, our business,
financial condition and results of operations could be seriously harmed. In
addition, we believe our success depends in part on introducing new service
offerings.

WE MAY BE UNABLE TO RECRUIT QUALIFIED SALES, TECHNICAL AND SUPPORT PERSONNEL

         Our ability to achieve significant revenue growth in the future will
greatly depend on our ability to recruit and train sufficient technical,
customer support and direct sales personnel. We have in the past and may in the
future experience difficulty in recruiting qualified sales, technical and
support personnel. To meet our needs for such personnel, we may need to use more
costly third-party consultants and independent contractors to supplement our own
professional services organization. Our inability to maintain an adequate direct
sales force and professional services organization could seriously harm our
business, financial condition and results of operations.

OUR FAILURE TO MANAGE GROWTH OF OPERATIONS INTERNALLY OR THROUGH ACQUISITIONS
MAY ADVERSELY AFFECT US

         Our current information systems, procedures and controls may not
continue to support any growth in our operations and may hinder our ability to
exploit the market for EAI and EMPI products and services. We cannot be certain
that we will continue to experience or successfully


                                       16
<PAGE>   17

manage growth that we achieve either through growth of internal operations or
through acquisitions. Our inability to sustain or manage our growth could
seriously harm our business, financial condition and results of operations. To
manage any growth, we must continue to:

         -        expand our sales, marketing and customer support organizations

         -        invest in the development of enhancements to existing products
                  and new products that meet changing customer needs

         -        improve our operational processes and management controls

         -        further develop our EAI and EMPI service offerings

         -        successfully integrate the assets and operations of acquired
                  businesses

         -        retain key employees and contracts

SALES AND IMPLEMENTATION CYCLES FOR OUR EAI AND EMPI SOLUTIONS CAN BE LENGTHY

         Sales cycles for our EAI and EMPI solutions can be lengthy. Our typical
sales cycle to customers in the healthcare market ranges between three to nine
months from our initial contact with a potential customer to the sales of our
solutions. We are unable to control many factors that will influence our
customers' buying decisions. The sales and implementation process involves a
significant technical evaluation and commitment of capital and other resources
by our customers. The sale and implementation of our solutions are subject to
delays due to our customers' internal budgets and procedures for approving large
capital expenditures and deploying new technologies.

OUR MARKETS ARE HIGHLY COMPETITIVE

         We compete in markets that are intensely competitive. We will be
required to devote a significant amount of resources to expand our presence in
our targeted markets. Additionally, in order to maintain our market share in the
healthcare market, we must preserve our relationships with our current customers
as well as establish relationships with new customers. We expect the markets for
our products and services to become more competitive as current competitors
expand their product offerings and new competitors enter the market. Increased
competition could result in price reductions, reduced gross margins and loss of
market share, any of which could seriously harm our business, financial
condition and results of operations.


                                       17
<PAGE>   18


         Many of our competitors have longer operating histories, significantly
greater financial, technical, marketing and other resources, significantly
greater name recognition, and a larger installed base of customers than we do.
Many of our competitors also may have well-established relationships with our
current and potential customers in our target markets. In addition, many of
these competitors have extensive knowledge of EAI and EMPI solutions and may be
in a better position than we are to devote significant resources toward the
development, promotion and sale of their products.

         Current and potential competitors may also respond more quickly than we
can to new or emerging technologies and changes in customer requirements. They
may have established or may establish cooperative relationships among themselves
or with third parties to increase the ability of their products to address
customer needs. Accordingly, it is possible that new competitors or alliances
among competitors may emerge and rapidly acquire significant market share. We
also expect that competition will increase as a result of software industry
consolidations. We cannot assure you that we will be able to compete
successfully against current and future competitors, or that competitive
pressure we face will not significantly harm our business, financial condition
and results of operations.

WE MUST KEEP PACE WITH RAPIDLY CHANGING TECHNOLOGY TO REMAIN COMPETITIVE

         The market for our products is characterized by rapid technological
change, such as the Internet, frequent new product introductions and
enhancements, changes in customer demands and evolving industry standards. Our
existing products could be rendered obsolete if we fail to


                                       18
<PAGE>   19

keep up in any of these ways. We have also found that the technological life
cycles of our products are difficult to estimate, partially because they may
vary according to the particular application. We believe that our future success
will depend upon our ability to continue to enhance our current product line
while we concurrently develop and introduce new products that keep pace with
competitive and technological developments. These developments require us to
continue to make substantial product development investments.

         Existing Products

         We currently serve a customer base with a wide variety of hardware,
software, database and networking platforms. To gain broad market acceptance, we
believe that we will have to support our products on a variety of platforms. Our
success will depend on, among others, the following factors:

         -        our ability to integrate our products with multiple platforms,
                  especially relative to our competition in our targeted markets

         -        the portability of our products, particularly the number of
                  hardware platforms, operating systems and databases that our
                  products can source or target

         -        the integration of additional software modules under
                  development with existing products

         -        our management of technical personnel and sub-contractors

         Future Products

         New technologies, most importantly, the Internet, have caused many
changes to healthcare practices and raised the expectations of customers for
timely service and efficient business processes. Even though the healthcare
industry has not widely adopted these changes, we believe that the Internet will
eventually touch every aspect of healthcare. We are currently adapting our
business so as to facilitate the adoption of these new technologies. We cannot
assure you, however, that we will be successful in developing and marketing
future product enhancements or new products that respond to technological
changes, shifting customer preferences or evolving industry standards. We may
experience difficulties that could delay product enhancements or new products or
increase our costs to develop these products. If we are unable to develop and
introduce new products or enhancements of existing products in a timely and
affordable manner or if we experience delays in the commencement of commercial
shipments of new products and enhancements, then customers may forego purchases
of our products and purchase those of our competitors.

OUR SUCCESS DEPENDS ON OUR ABILITY TO PROTECT OUR PROPRIETARY TECHNOLOGY

         Our success depends upon our ability to maintain the proprietary and
confidential technology incorporated in our products. We rely on a combination
of patent, copyright, trademark and trade secret laws, as well as
confidentiality agreements and licensing arrangements, to establish and protect
our proprietary rights. We presently have no patents granted. Despite our
efforts to protect our proprietary rights, existing copyright, trademark and
trade secret laws afford only limited protection. In addition, the laws of
certain foreign countries do not protect our rights to the same extent as do the
laws of the United States. Attempts may be


                                       19
<PAGE>   20

made to copy or reverse engineer aspects of our products or to obtain and use
information that we regard as proprietary. We cannot assure you that we will be
able to protect our proprietary rights against unauthorized third-party copying
or use. Furthermore, policing the unauthorized use of our products is difficult,
and litigation may be necessary in the future to enforce our intellectual
property rights, to protect our trade secrets or to determine the validity and
scope of the proprietary rights of others. Such litigation could result in
substantial costs and diversion of our resources.


INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS CAN BE COSTLY AND RESULT IN THE LOSS
OF SIGNIFICANT RIGHTS

         It is possible that third parties will claim that we have infringed
their current or future intellectual property rights. We expect that EAI and
EMPI software developers may increasingly be subject to infringement claims as
the number of products in different industry segments overlap. Any claims, with
or without merit, could be time-consuming, result in costly litigation, cause
product shipment delays, or require us to enter into royalty or licensing
agreements, any of which could seriously harm our business, financial condition
and results of operations. We cannot assure you that such royalty or licensing
agreements, if required, would be available on terms acceptable to us, if at
all. Additionally, we cannot assure you that legal action claiming intellectual
property infringement will not be commenced against us, or that we would prevail
in such litigation given the complex technical issues and inherent uncertainties
in litigation. In the event an intellectual property claim against us was
successful and we could not obtain a license on acceptable terms or license a
substitute technology or redesign to avoid infringement, our business, financial
condition and results of operations would be seriously harmed. Even if we
prevail in litigation, the expense of litigation could be significant and could
seriously harm our business, financial condition and results of operations.

WE RELY ON THIRD PARTIES FOR TECHNOLOGY IN OUR PRODUCTS

         We depend upon third-party suppliers to provide software that is
incorporated in certain of our products. We do not have control over the
scheduling and quality of work of such third-party software suppliers.
Additionally, the third-party software may not continue to be available to us on
commercially reasonable terms, if at all. Our agreements to license certain
third-party software will terminate after specified dates unless they are
renewed. If we cannot maintain licenses to key third-party software, shipments
of our products could be delayed until equivalent software could be developed or
licensed and integrated into our products.

THERE ARE MANY RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

         While over 95% of our revenue in 2000, and approximately 90% for the
years ended December 31, 1999 and 1998, was generated within the United States,
we have customers in several countries worldwide. International sales in certain
foreign markets are subject to a variety of risks, including

         -        difficulties in establishing and managing international
                  distribution channels

         -        localizing software products for sales in foreign markets and
                  enforcing intellectual property rights


                                       20
<PAGE>   21

         -        fluctuations in the value of foreign currencies, including the
                  Euro

         -        changes in duties and quotas

         -        introduction of tariff or non-tariff barriers

         -        economic, political and regulatory changes

In addition, to the extent profit is generated or losses are incurred in foreign
countries, our effective income tax rate may be materially affected. We do not
currently engage in hedging transactions, but we may do so in the future. We
cannot assure you that any of the factors described above will not seriously
harm our business, financial condition and results of operations.

FAILURE TO RECRUIT AND RETAIN KEY EMPLOYEES WILL SERIOUSLY HARM OUR BUSINESS

         Our success is highly dependent upon the continued service and skills
of our executive officers and other key technical, sales and marketing
employees. We do not maintain key man life insurance on any of our employees,
and we have not entered into employment agreements with any key employees that
provide for any fixed term of service. In addition, our future success will
depend considerably on our ability to attract and retain highly skilled
employees and management personnel. Competition for such personnel is intense.
We cannot assure you that we will be successful in attracting and retaining
highly skilled employees and management personnel. Further, we anticipate growth
and expansion into areas and activities which may require the addition of new
highly skilled employees and the development of additional expertise by existing
management personnel. Any new highly skilled personnel may require training and
education and take time to reach full productivity. The failure to attract and
retain such employees or to develop such expertise could seriously harm our
business, financial condition or operating results.

OUR PRODUCTS MAY BE AFFECTED BY UNKNOWN SOFTWARE DEFECTS

         Our products depend on complex software, both internally developed and
licensed from third parties. Complex software often contains defects,
particularly when first introduced or when enhancements or new versions are
released. Although we conduct extensive testing, we may not discover software
defects that affect our new or current products or enhancements until after they
are deployed. Although we have not experienced any material software defects to
date, it is possible that, despite testing by us, defects may occur in our
software. These defects could cause performance interruptions, which could
damage our reputation with existing or potential customers, increase our service
costs, cause us to lose revenue, delay market acceptance or divert our
development resources, any of which could cause our business to suffer.

WE MAY INCUR MATERIAL COSTS IN CONNECTION WITH PRODUCT LIABILITY CLAIMS

         Because many of our clients use our products to integrate important
applications in their organizations, any errors, defects or other performance
problems of our products could result in financial or other damages to our
clients. In the event of any errors,


                                       21
<PAGE>   22

defects or other performance problems in our products or services, our clients
could seek damages for losses from us, which, if successful, could seriously
harm our business, financial condition or results of operations. Although our
license agreements typically contain provisions designed to limit our exposure
to product liability claims, existing or future laws or unfavorable judicial
decisions could negate such limitation of liability provisions. We have not
experienced any product liability claims to date, however, a product liability
claim brought against us, even if not successful, would likely be time consuming
and costly.

GOVERNMENT REGULATION COULD ADVERSELY AFFECT OUR BUSINESS

         Our business is subject to government regulation. Existing as well as
new laws and regulations could adversely affect our business. Some computer
applications and software are considered medical devices and are subject to
regulation by the United States Food and Drug Administration (the "FDA"). We do
not believe that our current products or services provided to the healthcare
industry are subject to FDA regulation. However, we may expand our application
and service offerings into areas that subject us to FDA regulation. We have no
experience in complying with FDA regulations. We believe that complying with FDA
regulations would be time consuming, burdensome and expensive and could delay
our introduction of new applications or services.

         By virtue of our products and services provided to the healthcare
industry, we are subject to extensive regulation relating to the confidentiality
and release of patient records, which are included in our databases. Federal and
state regulations govern both the disclosure and the use of confidential patient
medical record information. Although compliance with these laws and regulations
is at present principally the responsibility of the hospital, physician or other
healthcare provider, regulations governing patient confidentiality rights are
evolving rapidly. Additional legislation governing the distribution of medical
records has been proposed at both the state and federal level. On August 22,
1996, President Clinton signed the Health Insurance Portability and
Accountability Act of 1996, or HIPAA, which mandates the use of standard
identifiers, security and other provisions protecting patients' confidentiality
rights by the Year 2000. Regulations have been proposed to implement these
requirements and we are designing our applications to comply with the proposed
regulations, but cannot assure you that we will be able to comply with those
proposed regulations in a timely manner or at all. Furthermore, until


                                       22
<PAGE>   23

the proposed regulations become final, they could change, which could cause us
to expend additional resources to comply with the revised standards.

         Another legislative change that may affect our business is the Balanced
Budget Act of 1997, which significantly changes the method of payment under the
Medicare and Medicaid programs, resulting in significant reductions in payments
to healthcare providers for inpatient, outpatient, home health and skilled
nursing services. This may affect the spending and purchasing patterns of our
customers or potential customers, causing our customers to reduce their
purchases of our products or postpone their investment decisions.

         In order to ensure continued compliance with changing government
standards and regulations, we monitor regulations affecting our business,
including those that will be mandated by HIPAA. We cannot assure you that
changes to state or federal laws will not materially restrict the ability of
healthcare organizations to invest in our products or submit information from
patient records using our software products.

OUR COMMON STOCK PRICE MAY BE HIGHLY VOLATILE

         The trading price of our common stock may be volatile. The stock market
in general, and the market for technology and software companies in particular,
has, from time to time, experienced extreme volatility that often has been
unrelated to the operating performance of particular companies. These broad
market and industry fluctuations may significantly affect the trading price of
our common stock, regardless of our actual operating performance. The trading
price of our common stock could be affected by a number of factors, including:

         -        changes in expectations of our future financial performance

         -        changes in securities analysts' estimates (or the failures to
                  meet such estimates)

         -        announcements of technological innovations

         -        customer and distributor relationship developments

         -        conditions affecting our targeted markets in general

         -        quarterly fluctuations in our revenue and financial results

         In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted. If this were to happen to us, litigation would be expensive and
would divert management's attention.

CERTAIN EVENTS COULD RESULT IN OUR BEING DELISTED FROM NASDAQ, WHICH COULD
REDUCE OUR ABILITY TO RAISE FUNDS

         If our stock price or net tangible assets were to drop below specified
levels, certain Nasdaq regulations would require the delisting of our shares.
Accordingly, our common stock could no longer be traded on Nasdaq. In such an
event, our shares could only be traded on over-the-counter bulletin board
systems. If our stock were to be delisted, then we may face significant
difficulties in raising additional capital on favorable terms, if at all.
Delisting would also negatively affect shareholder liquidity.


                                       23
<PAGE>   24

ITEM 2.           PROPERTIES

         Healthcare.com leases approximately 16,101 square feet of office space
under three leases in Marietta, Georgia for its principal executive and
administrative offices and its corporate sales, marketing and research and
development facilities. These leases all expire in February 2003. These three
leases combined require monthly rental payments of approximately $23,222.
Healthcare.com leases approximately 27,533 square feet of office space in
Dallas, Texas for most of its services personnel for monthly rental payments of
approximately $66,574, pursuant to a lease which expires in January 2006.
Healthcare.com leases approximately 9,550 square feet of office space in
Columbus, Ohio for services and product development personnel for monthly rental
payments of approximately $9,152, pursuant to a lease which expires in July
2002. Healthcare.com also leases approximately 4,313 and 1,895 square feet of
office space in Charleston, South Carolina and Honolulu, Hawaii, respectively,
for SolutionSourcing service personnel for combined monthly rental payments of
approximately $13,843, pursuant to leases which expire in August 2001 and
December 2002, respectively.

ITEM 3.           LEGAL PROCEEDINGS

         As of the date hereof, there are no material legal proceedings pending
against Healthcare.com. From time to time, Healthcare.com is involved in legal
proceedings and litigation arising in the ordinary course of business.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of security holders during the
quarter ended December 31, 2000.


                                       24
<PAGE>   25

                                     PART II

ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS

         Healthcare.com's common stock, $0.01 par value per share, together with
associated preferred stock purchase rights, is traded on the Nasdaq National
Market under the symbol "HCDC." The following table sets forth the high and low
sales prices of the common stock as reported by the Nasdaq National Market for
the periods indicated.

<TABLE>
<CAPTION>
                                                   HIGH           LOW
                                                  -------       -------

         <S>                                      <C>           <C>
         1999
              First Quarter.................      $ 10.25       $  3.37
              Second Quarter................         4.25          2.00
              Third Quarter.................         3.06          1.75
              Fourth Quarter................         3.94          1.53

         2000
              First Quarter.................      $  6.13       $  3.38
              Second Quarter................         6.00          2.25
              Third Quarter.................         3.94          2.25
              Fourth Quarter................         2.69          1.19
</TABLE>

         As of February 28, 2001, there were approximately 1,995 holders of
record of Healthcare.com's common stock.

         The Company has never paid any cash dividends with respect to its
common stock and does not anticipate paying cash dividends in the foreseeable
future. The Company currently intends to retain all earnings, if any, for use in
the expansion of the Company's business. The payment of dividends, if any, in
the future with respect to the Company's common stock is within the discretion
of the Board of Directors and will depend on the Company's earnings, capital
requirements, financial condition and other relevant factors. The Company is a
party to a Loan and Security Agreement that contains covenants restricting the
payment of dividends on the Company's common stock.

         On December 21, 1999, Healthcare.com and Cybear, Inc., an unrelated
third-party customer, entered into a convertible note and warrant purchase
agreement pursuant to which Healthcare.com obtained a $3 million working capital
loan with interest payable quarterly at a rate of 7.8% per annum. The
convertible note was paid in full on the due date, December 21, 2000. The
warrant purchase agreement entitles the holder to purchase 47,022 shares of the
Company's common stock at any time on or before December 21, 2004 at an exercise
price of $3.19 per share. The shares of common stock underlying the convertible
note and the warrant purchase agreement are subject to piggyback registration
rights. This transaction was exempt from registration under Section 4(2) of the
Securities Act as a transaction not involving a public offering. In addition,
the parties were sophisticated investors and had access to information about the
Company.


                                       25
<PAGE>   26

ITEM 6.           SELECTED FINANCIAL DATA

         The following selected consolidated financial data should be read in
conjunction with Healthcare.com's consolidated financial statements and related
notes thereto, and with Management's Discussion and Analysis of Financial
Condition and Results of Operations included elsewhere in this Report. The
selected consolidated financial statement data for the years ended December 31,
2000, 1999, 1998, 1997 and 1996 are derived from Healthcare.com's audited
consolidated financial statements and give retroactive effect to the 1998 merger
of a subsidiary of Healthcare.com and HUBLink, Inc., which merger was accounted
for as a pooling of interests. Historical results are not necessarily indicative
of results of operations to be expected in the future.

<TABLE>
<CAPTION>
                                                                        FOR THE YEARS ENDED DECEMBER 31,
                                                        ----------------------------------------------------------------
                                                          2000          1999          1998          1997          1996
                                                        --------      --------      --------      --------      --------
                                                                   (In thousands, except for per share data)

<S>                                                     <C>           <C>           <C>           <C>           <C>
STATEMENTS OF OPERATIONS:

Total revenue ....................................      $ 48,313      $ 25,315      $ 27,184      $ 18,064      $ 20,243
Operating earnings (loss) ........................      $  3,860      $ (7,977)     $  1,599      $ (8,506)     $    497
Net earnings (loss) attributable to common
shareholders .....................................      $  2,808      $ (8,504)     $  1,498      $ (8,596)     $    107
Diluted net earnings (loss) per share of
   common stock ..................................      $   0.10      $  (0.34)     $   0.06      $  (0.38)     $   0.01
Shares used in the calculation of diluted
   net earnings (loss) per share of common
   stock .........................................        28,119        25,347        24,867        22,587        21,277
</TABLE>

<TABLE>
<CAPTION>
                                                                               AS OF DECEMBER 31,
                                                        ----------------------------------------------------------------
                                                          2000          1999          1998          1997          1996
                                                        --------      --------      --------      --------      --------
                                                                                 (In thousands)

<S>                                                     <C>           <C>           <C>           <C>           <C>
CONSOLIDATED BALANCE SHEETS DATA:
Total assets .....................................      $ 38,824      $ 27,267      $ 31,535      $ 28,940      $ 33,085
Long-term debt and obligations under
   capital leases, excluding current
   installments ..................................      $    151      $    254      $    642      $    316      $  4,316
Redeemable preferred stock .......................      $    152      $    348      $     --      $     --      $     --
</TABLE>


                                       26
<PAGE>   27
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         Certain of the statements made in this Item 7 and in other portions of
this Report and in documents incorporated by reference herein are
forward-looking statements. Such forward-looking statements are not guarantees
of future performance and are subject to risks, uncertainties and other factors
that may cause the actual results, performance or achievements of the Company
to differ materially from historical results or from any results expressed or
implied by such forward-looking statements. Such factors include, without
limitation, those discussed in "Item 1. Business -- Factors That May Affect
Future Performance" herein.

OVERVIEW

         Healthcare.com develops and markets enterprise application integration
solutions that provide the distributed infrastructure for data access,
integration, indexing and extension, and offers packaged solutions that
implement and build upon these products. In addition, we offer integration and
Information Technology ("IT") outsourcing services to healthcare enterprises
and healthcare application vendors which allow them to outsource their
integration or IT functions. Healthcare.com's customers are focused within the
healthcare and state and local government markets.

         The Company was incorporated in Georgia in June 1994 as Healthdyne
Information Enterprises, Inc. ("HDIE"), a wholly-owned subsidiary of Healthdyne,
Inc., and was initially focused on providing enterprise-wide clinical
information management solutions for integrated healthcare delivery networks. In
November 1995, Healthdyne, Inc. distributed to its shareholders all of the
outstanding shares of HDIE common stock in a spin-off. In October 1997, HDIE
redefined its strategic direction to focus on providing software products and
services to support the enterprise-wide integration of information. HDIE changed
its name to HIE, Inc. ("HIE"). As part of the strategic focus, HIE (1) acquired
HUBLink, Inc., a privately-held integration software product company, in May
1998 in a pooling-of-interests transaction and (2) sold assets related to
certain non-strategic consulting services to Superior Consultant Holdings
Corporation in December 1998. On March 13, 2000, the Company signed an
agreement, effective as of February 25, 2000, to purchase certain service
contracts and other assets of the Integrated Solutions Division ("ISD"), a
division of Thermo Information Solutions, Inc. ("Thermo"). ISD, based in
Charleston, South Carolina, designs, implements and manages information
technology solutions. On April 10, 2000, the name of the Company was changed
from HIE, Inc. to Healthcare.com Corporation as part of the Company's
introduction of a new healthcare, business-to-business product strategy to
complement and extend its existing enterprise-wide integration solution
business.

         Healthcare.com sells its software products to distributors and
application vendors, as well as directly to end-users. Software license sales
are comprised of (1) full-use licenses, which provide the end-user with full
functionality of the product and (2) limited use licenses, which restrict the
use of certain functionality of the product or the number of application
interfaces. A typical distributor or application vendor agreement includes an
initial purchase of software for resale with additional licenses purchased
periodically during the term of the agreement. Sales directly to end-users are
generally for perpetual licenses for a one-time, up-front fee.


                                      27
<PAGE>   28


         Healthcare.com recognizes revenue from two primary sources, software
licenses and services. Software license revenue is recognized in accordance
with the criteria set forth in Statement of Position ("SOP") 97-2, Software
Revenue Recognition and SOP 98-9 Software Revenue Recognition with Respect to
Certain Transactions issued by the Accounting Standards Executive Committee of
the American Institute of Certified Public Accountants and Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements. Accordingly,
Healthcare.com recognizes software license revenue when: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred; (3) the fee is
fixed or determinable; and (4) collectibility is probable.

         Services revenue includes fees for product implementation and
integration services, outsourcing services including facilities management and
product development, software support and maintenance services and education.
Product implementation and integration services are generally provided under
contracts with terms of less than one year. Revenue is recognized as the work
is performed or, in the case of a fixed-fee contract, on a
percentage-of-completion basis, even though some services may be prepaid. The
Company provides customers the ability to outsource their integration of
software, application hosting and/or their IT facilities management functions.
Facilities management outsourcing arrangements are typically one year or longer
for a fixed monthly fee. Revenue is recognized monthly in accordance with the
fixed-fee agreement. Product development outsourcing arrangements are typically
fixed-fee contracts that are one year or longer for which revenue is recognized
on a percentage-of-completion basis. Software support and maintenance services
are generally provided under one-year renewable service contracts for a prepaid
standard fee. Revenue is recognized ratably on a straight-line basis over the
term of the contract. Education classes are provided for a standard per-student
charge and revenue is recognized as the service is provided.

         Research and development expenses are accounted for in accordance with
the provisions of the Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 86, "Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed" ("SFAS 86"). SFAS 86
requires capitalization of certain software development costs subsequent to the
establishment of technological feasibility. Based on Healthcare.com's product
development model, technological feasibility is established upon completion of
a working model.


                                      28
<PAGE>   29


RESULTS OF OPERATIONS

         The following table sets forth both Healthcare.com's total revenue and
the percentage of total revenue (unless otherwise indicated) for each component
included in Healthcare.com's Consolidated Statements of Operations for the
years indicated:


<TABLE>
<CAPTION>
                                                                            YEARS ENDED DECEMBER 31,
                                                                 -----------------------------------------
                                                                   2000            1999             1998
                                                                 -------          -------          -------

<S>                                                              <C>              <C>              <C>
Total Healthcare.com Revenue (in 000's)                          $48,313          $25,315          $27,184

Revenue:
     Software .......................................               26.3%            27.6%            45.7%
     Services and other .............................               73.7%            72.4%            54.3%
                                                                 -------          -------          -------
         Total revenue ..............................              100.0%           100.0%           100.0%
                                                                 -------          -------          -------

Cost of revenue:
     Software (as a % of software revenue) ..........               13.3%            19.2%             6.9%
     Services and other (as a % of services and other
       revenue) .....................................               64.4%            55.6%            48.1%
         Total cost of revenue ......................               51.0%            45.6%            29.3%
                                                                 -------          -------          -------

         Gross profit ...............................               49.0%            54.4%            70.7%

Operating expenses:
     Sales and marketing ............................               17.2%            27.5%            24.5%
     Research and development .......................                8.8%            16.0%            14.3%
     General and administrative .....................               12.5%            21.9%            21.1%
     Provision for doubtful accounts ...............                 2.5%            20.5%             1.0%
     Merger costs ...................................                 --%              --%             3.9%
                                                                 -------          -------          -------
         Operating earnings (loss) ..................                8.0%           (31.5)%            5.9%

Interest expense ....................................               (2.3)%           (2.1)%           (1.0)%
Interest income .....................................                0.4%             0.1%             0.6%
                                                                 -------          -------          -------
         Earnings (loss) before income taxes ........                6.1%           (33.5)%            5.5%

Income taxes ........................................               (0.2)%             --%              --%
                                                                 -------          -------          -------

         Net earnings (loss) ........................                5.9%           (33.5)%            5.5%
                                                                 =======          =======          =======
</TABLE>


                                       29
<PAGE>   30


Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

         REVENUE. Revenue increased by 91% to $48.3 million in the year ended
December 31, 2000 from $25.3 million in the year ended December 31, 1999. As
discussed below, the Company experienced increases in both software revenue and
services and other revenue.

         SOFTWARE. Software license revenue increased by 82% to $12.7 million
in the year ended December 31, 2000 from $7.0 million in the year ended
December 31, 1999. As a percentage of total revenue, software license revenue
decreased to 26.3% in the year ended December 31, 2000 from 27.6% in the year
ended December 31, 1999. The dollar increase in software revenue was primarily
attributable to an expanded market, which now includes application vendors, for
the Company's existing software products. The decrease in software revenue as a
percentage of total revenue resulted from a large increase in services and
other revenue due to the acquisition of ISD.

         SERVICES AND OTHER. Services and other revenue increased by 94% to
$35.6 million in the year ended December 31, 2000 from $18.3 million in the
year ended December 31, 1999. As a percentage of total revenue, services and
other revenue increased to 73.7% in the year ended December 31, 2000 from 72.4%
in the year ended December 31, 1999. The dollar and percentage of revenue
increases in services and other revenue was primarily due to additional service
revenue from the acquisition of ISD effective February 25, 2000. The Company's
integration services for the year ended December 31, 2000 were relatively flat
compared to the year ended December 31, 1999 due to various industry factors
affecting healthcare providers.

         COST OF REVENUE. Total cost of revenue increased 114% to $24.6 million
for the year ended December 31, 2000 from $11.5 million for the year ended
December 31, 1999. Total cost of revenue increased primarily from the
acquisition of ISD in the first quarter of 2000.

         SOFTWARE. Cost of software license revenue consists principally of
royalty payments to third parties for software products that were sold with
Healthcare.com's products, software purchased from third parties for resale,
and amortization of capitalized software development costs. Cost of software
license revenue increased by 26% to $1.7 million in the year ended December 31,
2000 from $1.3 million in the year ended December 31, 1999. As a percentage of
software license revenue, cost of software license revenue decreased to 13.3%
in the year ended December 31, 2000 from 19.2% in the year ended December 31,
1999. The $350,000 increase in the cost of software revenue is due primarily to
an increase in amortization of capitalized software development costs for the
year ended December 31, 2000, compared to the year ended December 31, 1999. The
decrease in cost of software revenue as a percentage of software revenue was a
result of the relatively high dollar increase in software revenue.

         SERVICES AND OTHER. Cost of services and other revenue consists
primarily of personnel, contract services, facility and systems costs incurred
in providing product implementation, integration projects, maintenance,
consulting and education services. Cost of services and other revenue increased
by 125% to $22.9 million in the year ended December 31, 2000 from $10.2


                                      30
<PAGE>   31


million in the year ended December 31, 1999. As a percentage of services and
other revenue, cost of services and other revenue increased to 64.4% in the
year ended December 31, 2000 from 55.6% in the year ended December 31, 1999.
The dollar increase in cost of services and other revenue was primarily
attributable to the acquisition of ISD during the first quarter of 2000. The
increase in cost of services and other revenue as a percentage of services and
other revenue was primarily attributable to the addition of long-term service
contracts obtained upon the acquisition of ISD, which have higher cost of
services rates than our traditional short-term service contracts.

         OPERATING EXPENSES

         SALES AND MARKETING. Sales and marketing expense consists primarily of
salaries, commissions and bonuses earned by sales and marketing personnel,
travel and promotional expenses. Sales and marketing expense increased by 19%
to $8.3 million in the year ended December 31, 2000 from $7.0 million in the
year ended December 31, 1999. As a percentage of total revenue, sales and
marketing expense decreased to 17.2% in the year ended December 31, 2000 from
27.5% in the year ended December 31, 1999. The dollar increase in sales and
marketing expense was primarily due to increases in salaries and commissions.
The decrease in sales and marketing expense as a percentage of revenue was a
result of the relatively high increase in software and service and other
revenue during the year ended December 31, 2000.

         RESEARCH AND DEVELOPMENT. Research and development expense includes
personnel costs, contract services, and travel associated with the development
of new products, enhancements of existing products and quality assurance
activities. Research and development expense increased by 6% to $4.3 million in
the year ended December 31, 2000 from $4.0 million in the year ended December
31, 1999. As a percentage of total revenue, research and development expense
decreased to 8.8% in the year ended December 31, 2000 from 16.0% in the year
ended December 31, 1999. Research and development expense increased due to an
increase in salaries and wages. The decrease in research and development
expense as a percentage of revenue was a result of an increase in software and
service and other revenue during the year ended December 31, 2000. Capitalized
costs related to internally developed software remained relatively consistent
at $1.4 million in the year ended December 31, 2000 compared to $1.3 million in
the year ended December 31, 1999.

         GENERAL AND ADMINISTRATIVE. General and administrative expense
consists primarily of personnel costs, outside professional fees, and software
and equipment costs associated with the finance, legal, human resources,
information systems, and administrative functions of Healthcare.com. General
and administrative expense also includes the amortization of goodwill. General
and administrative expense increased by 9% to $6.0 million in the year ended
December 31, 2000 from $5.5 million in the year ended December 31, 1999. As a
percentage of total revenue, general and administrative expense decreased to
12.5% in the year ended December 31, 2000 from 21.9% in the year ended December
31, 1999. The increase in general and administrative expense was primarily
attributable to general and administrative expenses related to the ISD
acquisition that the Company completed in the first quarter of 2000. The
decrease in general and administrative expense as a percentage of total revenue
was primarily due to an increase in software and services and other revenue for
the year ended December 31, 2000.


                                      31
<PAGE>   32


         PROVISION FOR DOUBTFUL ACCOUNTS. The provision for doubtful accounts
decreased to $1.2 million in the year ended December 31, 2000 from $5.2 million
in the year ended December 31, 1999. As a percentage of total revenue, the
provision for doubtful accounts decreased to 2.5% in the year ended December
31, 2000 from 20.5% in the year ended December 31, 1999. The provision for
doubtful accounts during 2000 primarily arose from two customers which declared
bankruptcy in the fourth quarter of 2000. The provision for doubtful accounts
during 1999 was primarily due to the uncertainty of the timing and ultimate
collection of an unpaid balance related to a single distributor.

         INTEREST EXPENSE. Interest expense increased $579,000 to $1.1 million
for the year ended December 31, 2000 from $529,000 for the year ended December
31, 1999. The increase in interest expense resulted from an increase in
short-term debt used primarily for working capital purposes.

         INCOME TAXES. The Company recorded a provision for income taxes of
$79,000 for the year ended December 31, 2000 relating to certain alternative
minimum tax restrictions on the use of the Company's net operating loss
carryforwards. As of December 31, 2000, Healthcare.com had net operating loss
carryforwards for tax reporting purposes of approximately $20.5 million, which
expire at various dates from 2009 through 2019. The Company had no provision
for income taxes for the year ended December 31, 1999 as a result of having a
loss before income taxes.


YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

         REVENUE

         Revenue decreased by 7% to $25.3 million in the year ended December
31, 1999 from $27.2 million in the year ended December 31, 1998. The Company
experienced a decrease in software revenue, which was partially offset by an
increase in services and other revenue.

         SOFTWARE. Software license revenue decreased by 44% to $7.0 million in
the year ended December 31, 1999 from $12.4 million in the year ended December
31, 1998. As a percentage of total revenue, software license revenue decreased
to 27.6% in the year ended December 31, 1999 from 45.7% in the year ended
December 31, 1998. Management believes that the dollar decrease in software
revenue was primarily attributable to the impact of the Year 2000 issue as
customers or potential customers used significant resources to correct or
update their existing systems for Year 2000 compliance and delayed purchases of
new software until the Year 2000 due to limited budgets or in order to avoid
implementing a formal Year 2000 compliance program with respect to the new
software. The decrease in software revenue as a percentage of total revenue
resulted from the decrease in software revenue previously discussed and the
increase in service revenue discussed below.

         SERVICES AND OTHER. Services and other revenue increased by 24% to
$18.3 million in the year ended December 31, 1999 from $14.8 million in the
year ended December 31, 1998. As a percentage of total revenue, services and
other revenue increased to 72.4% in the year ended


                                      32
<PAGE>   33


December 31, 1999 from 54.3% in the year ended December 31, 1998. The dollar
increase in services and other revenue was primarily due to an increase in the
sale and completion of projects. The increase in services and other revenue as
a percentage of total revenue was primarily due to decreased software sales
during the year ended December 31, 1999.

         COST OF REVENUE

         SOFTWARE. Cost of software license revenue consists principally of
royalty payments to third parties for software products that were sold with
Healthcare.com's products, software purchased from third parties for resale,
and amortization of capitalized software development costs. Cost of software
license revenue increased by 58% to $1.3 million in the year ended December 31,
1999 from $852,000 in the year ended December 31, 1998. As a percentage of
software license revenue, cost of software license revenue increased to 19.2%
in the year ended December 31, 1999 from 6.9% in the year ended December 31,
1998. Cost of software revenue increased due to an increase in amortization of
capitalized software for the year ended December 31, 1999 compared to the year
ended December 31, 1998. The increase in cost of software revenue as a
percentage of software revenue was a result of decreased software sales and the
increase in amortization of capitalized software during the year ended December
31, 1999 compared to the year ended December 31, 1998, as previously discussed.

         SERVICES AND OTHER. Cost of services and other revenue consists
primarily of personnel, contract services, facility and systems costs incurred
in providing product implementation, integration projects, maintenance,
consulting and education services. Cost of services and other revenue increased
by 44% to $10.2 million in the year ended December 31, 1999 from $7.1 million
in the year ended December 31, 1998. As a percentage of services and other
revenue, cost of services and other revenue increased to 55.6% in the year
ended December 31, 1999 from 48.1% in the year ended December 31, 1998. The
dollar increase in cost of services and other revenue was primarily due to an
increase in service personnel necessary to complete service projects. The
increase in cost of services and other revenue as a percentage of services and
other revenue was primarily attributable to an increase in service personnel
and the related startup time to train and educate new staff.

         OPERATING EXPENSES

         SALES AND MARKETING. Sales and marketing expense consists primarily of
salaries, commissions and bonuses earned by sales and marketing personnel,
travel and promotional expenses. Sales and marketing expense increased by 4% to
$7.0 million in the year ended December 31, 1999 from $6.7 million in the year
ended December 31, 1998. As a percentage of total revenue, sales and marketing
expense increased to 27.5% in the year ended December 31, 1999 from 24.5% in
the year ended December 31, 1998. The dollar increase in sales and marketing
expense was primarily due to additional sales personnel to market solutions
developed for financial/banking markets. The increase in sales and marketing
expense as a percentage of total revenue was primarily attributable to the
addition of sales personnel, discussed above, and to a decrease in software
sales for 1999.

         RESEARCH AND DEVELOPMENT. Research and development expense includes
personnel costs, contract services, and travel associated with the development
of new products,


                                      33
<PAGE>   34


enhancements of existing products and quality assurance activities. Research
and development expense increased by 4% to $4.0 million in the year ended
December 31, 1999 from $3.9 million in the year ended December 31, 1998. As a
percentage of total revenue, research and development expense increased to
16.0% in the year ended December 31, 1999 from 14.3% in the year ended December
31, 1998. Research and development expense increased due to an increase in
development costs for solutions in the financial/banking market. Additionally,
research and development expenses increased due to development costs for
solutions that complement the Company's existing products. Capitalized costs
related to internally developed software remained relatively consistent at $1.3
million in the year ended December 31, 1999, compared to $1.2 million in the
year ended December 31, 1998.

         GENERAL AND ADMINISTRATIVE. General and administrative expense
consists primarily of personnel costs, outside professional fees, and software
and equipment costs associated with the finance, legal, human resources,
information systems, and administrative functions of Healthcare.com. General
and administrative expense also includes amortization of goodwill. General and
administrative expense decreased by 4% to $5.5 million in the year ended
December 31, 1999 from $5.7 million in the year ended December 31, 1998. As a
percentage of total revenue, general and administrative expense increased to
21.9% in the year ended December 31, 1999 from 21.1% in the year ended December
31, 1998. The slight increase in general and administrative expense as a
percentage of total revenue was primarily due to the decrease in software sales
for the year ended December 31, 1999.

         PROVISION FOR DOUBTFUL ACCOUNTS. The provision for doubtful accounts
increased to $5.2 million in the year ended December 31, 1999 from $270,000 in
the year ended December 31, 1998. As a percentage of total revenue, the
provision for doubtful accounts increased to 20.5% in the year ended December
31, 1999 from 1.0% in the year ended December 31, 1998. The increase in the
provision for doubtful accounts was primarily due to the uncertainty of the
timing and ultimate collection of an unpaid balance related to a single
distributor. Due to (1) the distributor's failure to pay the majority of its
receivable balance when it became due on December 31, 1999 and (2) the
distributor's failure to make a commitment of when or how much it would pay,
the Company increased its allowance for doubtful accounts by the full amount of
the distributor's receivable balance.

         INCOME TAXES. Healthcare.com had no provision for income taxes in the
years ended December 31, 1999 or 1998 as a result of a loss before income taxes
for 1999 and Healthcare.com utilizing net operating loss carryforwards in 1998.

LIQUIDITY AND CAPITAL RESOURCES

         At December 31, 2000, the Company had $5.0 million in cash and cash
equivalents compared to $5.6 million at December 31, 1999. At December 31, 2000
Healthcare.com had working capital of $5.4 million compared to negative working
capital of $238,000 at December 31, 1999. The working capital increase was
primarily due to profitable operations during 2000 and the ISD acquisition.

         Net cash provided by operating activities was $170,000 in the year
ended December 31, 2000 compared to net cash provided by operating activities
of $429,000 in the year ended


                                      34
<PAGE>   35


December 31, 1999. This slight decrease in cash provided by operating
activities was primarily the net result of the increase in net accounts
receivable offset somewhat by net earnings growth during 2000.

         Net cash used in investing activities decreased to $1.3 million in the
year ended December 31, 2000 from $2.3 million in the year ended December 31,
1999. This decreased use of cash of $1.0 million was primarily due to cash
obtained in connection with the ISD acquisition and a decrease in capital
expenditures during 2000, compared to 1999.

         Net cash provided by financing activities was $479,000 in the year
ended December 31, 2000, compared to net cash provided by financing activities
of $4.3 million in the year ended December 31, 1999. This decrease of $3.8
million in cash provided by financing activities is primarily the result of
repaying the convertible note payable which accounted for a $3.0 million use of
cash in 2000 compared to $3.0 million provided in 1999, partially offset by the
$3.0 million borrowed under the line of credit in 2000.

          On December 21, 1999, the Company entered into a convertible note and
warrant purchase agreement with Cybear, Inc., pursuant to which the Company
obtained a $3.0 million working capital loan with interest payable quarterly at
a rate of 7.8% per annum, and the principal payable on December 21, 2000. The
convertible note was paid in full on December 21, 2000, but the warrant to
purchase 47,022 shares of the Company's common stock at any time before
December 21, 2004, at an exercise price of $4.875 per share remains outstanding
as of December 31, 2000.

          On December 31, 1999, the Company entered into a one-year Amended and
Restated Loan and Security Agreement with Silicon Valley Bank (the "Bank"),
which provides for a revolving line of credit up to $3.0 million (the "$3.0
million LOC") subject to borrowing base limitations described in the agreement.
The $3.0 million LOC bears interest at the Bank's prime rate (9.5% at December
31, 2000) and is secured by $3.0 million of cash equivalents. On December 22,
2000, the $3.0 million LOC was modified to extend the maturity date to January
25, 2001, and the balance outstanding under the $3.0 million LOC was $3.0
million at December 31, 2000. The $3.0 million LOC was paid in full on January
25, 2001.

         On February 24, 2000, the Company entered into an Accounts Receivable
Financing Agreement (the "Agreement") with the Bank, which provided for an
extension of credit in order to finance receivables up to $6.0 million. On
December 20, 2000, this Agreement was terminated. In conjunction with the
Agreement, the Company issued a Stock Purchase Warrant to the Bank, which
entitles the holder to purchase 61,539 shares of the Company's common stock at
any time on or before February 23, 2005 at an exercise price of $4.875 per
share. The Stock Purchase Warrant had not been exercised as of December 31,
2000.

         On December 20, 2000, the Company entered into a $7.0 million
revolving line of credit (the "$7.0 million LOC") with the Bank, of which $4.6
million was available for borrowing under the borrowing base limitation at
December 31, 2000. The balance outstanding under the $7.0 million LOC was $3.0
million on December 31, 2000. The $7.0 million LOC provides for borrowings
bearing interest at the Bank's prime rate plus 1.5% (11% at December 31, 2000)
is secured by the Company's assets, including intellectual property, and
expires on December 19,


                                      35
<PAGE>   36


2001. In conjunction with obtaining the $7.0 million LOC, the Company issued a
Stock Purchase Warrant to the Bank which entitles the holder to purchase 25,000
shares of the Company's common stock at any time on or before December 20, 2005
at an exercise price of $1.31 per share. The warrant remains outstanding at
December 31, 2000.

         On March 13, 2000 (the "closing date"), the Company signed an
agreement, effective as of February 25, 2000, to purchase certain service
contracts and certain liabilities of ISD, a division of Thermo. ISD, based in
Charleston, South Carolina, designs, implements and manages information
technology solutions. The purchase price consisted of 1,307,345 shares of the
Company's common stock and a warrant to purchase an additional 261,469 shares
of the Company's common stock at any time on or before March 13, 2004 at an
exercise price of $4.207 per share. On the closing date, the fair value of the
securities issued was $5,500,000. As part of the transaction, the Company
received $1,000,000 in cash for working capital purposes from Thermo. Thermo
had a one-time right, exercisable at any time on or before September 14, 2000,
subject to certain limitations, to receive additional shares of Healthcare.com
common stock in the event that the average trading price of Healthcare.com
common stock during the 10-day trading period prior to its election was below
$4.207 per share. On July 14, 2000, Thermo exercised this right, resulting in
the issuance of 585,128 additional shares of Healthcare.com common stock.

         Healthcare.com is committed to make expenditures under non-cancelable
operating leases and capital lease agreements for certain facilities and
equipment. These leases expire at various dates through 2006. At December 31,
2000, Healthcare.com had $5.8 million in outstanding capital and operating
lease obligations.

         Based on the Company's business plan and business model projections,
the Company believes that currently available cash, anticipated cash flow from
operations and borrowings under existing or future credit facilities will be
sufficient to meet Healthcare.com's requirements for at least the next twelve
months. Healthcare.com may seek to raise additional financing to support
expansion, develop new or enhanced applications and services, respond to
competitive pressures, acquire complementary businesses or technologies or take
advantage of favorable market conditions. In such event, or if the Company's
cash needs or plans change, Healthcare.com may seek to raise additional funds
by incurring debt, or by issuing equity securities, by entering into strategic
relationships or through other arrangements. There can be no assurance,
however, that Healthcare.com will be able to raise any additional amounts on
reasonable terms, if at all.

BACKLOG

         As of December 31, 2000, Healthcare.com's revenue backlog totaled
$27.1 million compared with $9.3 million as of December 31, 1999. The increase
in backlog is primarily a result of the acquisition of ISD during 2000, which
added significant backlog associated with two service contracts. Revenue
backlog is comprised of contracted amounts for implementation services,
maintenance fees paid in advance and other unearned revenue relating to
accepted orders or agreements for the delivery of Healthcare.com's products and
services. Revenue included in backlog is generally expected to be recognized
over the next twelve months.


                                      36
<PAGE>   37


Generally, customer orders and agreements included in backlog are subject to
cancellation and there can be no assurance that backlog will be realized.

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. ("SFAS") 133, Accounting for
Certain Derivative Instruments and Certain Hedging Activities, as amended by
SFAS 137, Accounting for Certain Derivative Instruments and Certain Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133, and SFAS
138, Accounting for Derivative Instruments and Hedging Activities - an
amendment of FASB Statement No. 133. As amended, SFAS 133 is to be implemented
for fiscal quarters of fiscal years beginning after June 15, 2000. SFAS 133
requires all derivatives to be carried on the balance sheet at fair value.
Changes in the fair value of derivatives must be recognized in the Company's
Consolidated Statement of Operations when they occur; however there is an
exemption for derivatives that qualify as hedges as defined by SFAS 133. If a
derivative qualifies as a hedge, a company can elect to use "hedge accounting"
to eliminate or reduce the income statement volatility that would arise from
reporting changes in a derivative's fair value. To date, the Company has not
invested in derivative instruments nor participated in hedging activities and,
therefore, does not anticipate there will be a material impact on the results
of operations or financial position from the adoption of SFAS 133, as amended.

         In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements ("SAB
101") and amended it in March and June 2000. SAB 101 summarizes existing
guidance on revenue recognition. The Company adopted the provisions of SAB 101
in the fourth quarter of 2000, and there was not a material impact on the
results of operations or financial position as a result of the adoption.

         In March 2000, the FASB issued FASB Interpretation No. 44 (FIN 44),
Accounting for Certain Transactions involving Stock Compensation - an
Interpretation of Accounting Principles Board Opinion No. 25. FIN 44 provides
guidance for certain issues that arose in applying APB 25. The provisions were
effective July 1, 2000, and, generally, are applied prospectively. Adoption of
FIN 44 has not materially impacted the Company's financial results.


                                      37
<PAGE>   38


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company is subject to interest rate risk on its line of credit
(variable-rate debt) and obligations under capital leases (fixed-rate debt). The
Company's primary market risk exposure relates to (i) the interest rate risk on
long-term and short-term borrowings, (ii) the impact of interest rate movements
on its ability to meet interest expense requirements and (iii) the impact of
interest rate movements on the Company's ability to obtain adequate financing
for future operations. The Company manages interest rate risk on its outstanding
long-term and short-term debt through its use of fixed and variable rate debt. A
hypothetical 1% increase in the Company's variable interest rate for a duration
of one year would result in additional interest expense of approximately
$60,000. While the Company cannot predict or manage its ability to refinance
existing debt or the impact interest rate movements will have on its existing
debt, management continues to evaluate its financial position on an on-going
basis.


                                      38
<PAGE>   39

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following represents results for each quarter in the years ended December
31, 2000 and 1999.

SUPPLEMENTARY FINANCIAL DATA
(UNAUDITED)
(In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                       NET EARNINGS
                                                                          (LOSS)
                                                                      ATTRIBUTABLE TO     DILUTED NET
                                       TOTAL                              COMMON        EARNINGS (LOSS)
                                      REVENUE        GROSS PROFIT      SHAREHOLDERS        PER SHARE
                                      -------        ------------     ---------------   --------------
<S>                                   <C>            <C>              <C>               <C>
QUARTER ENDED:


March 31, 2000                        $ 9,832          $ 4,898          $   201           $   0.01

June 30, 2000                          13,336            6,135              851               0.03

September 30, 2000                     12,729            6,402            1,061               0.04

December 31, 2000*                     12,416            6,246              695               0.02
                                      -------          -------          -------           --------

YEAR ENDED DECEMBER 31, 2000          $48,313          $23,681          $ 2,808           $   0.10
                                      =======          =======          =======           ========

QUARTER ENDED:

March 31, 1999                        $ 5,245          $ 2,700          $(1,768)          $  (0.07)

June 30, 1999                           6,350            3,285           (1,252)             (0.05)

September 30, 1999                      7,212            4,165             (472)             (0.02)

December 31, 1999*                      6,508            3,629           (5,012)             (0.20)
                                      -------          -------          -------           --------

YEAR ENDED DECEMBER 31, 1999          $25,315          $13,779          $(8,504)          $  (0.34)
                                      =======          =======          =======           ========
</TABLE>


* During the quarter ended December 31, 2000 and December 31, 1999, the Company
  recorded a $1,200 and $4,745, respectively, provision for doubtful accounts.

Consolidated Financial Statements for the years ended December 31, 2000, 1999
and 1998


<TABLE>
     <S>                                                                                             <C>
     Independent Auditors' Report....................................................................F-1
     Consolidated Balance Sheets.....................................................................F-2
     Consolidated Statements of Operations...........................................................F-3
     Consolidated Statements of Shareholders' Equity.................................................F-4
     Consolidated Statements of Cash Flows...........................................................F-5
     Notes to Consolidated Financial Statements......................................................F-7
</TABLE>


                                       39

<PAGE>   40


                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Shareholders
Healthcare.com Corporation


We have audited the accompanying consolidated balance sheets of Healthcare.com
Corporation and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 2000. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Healthcare.com
Corporation and subsidiaries as of December 31, 2000 and 1999, and the results
of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America.


                                             /s/ KPMG LLP
                                             ----------------------------


Atlanta, Georgia
January 19, 2001, except as to note 15,
  which is as of January 25, 2001


                                      F-1
<PAGE>   41


                  HEALTHCARE.COM CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                                                    December 31,
                                                                                              ---------------------------
                                                                                                2000               1999
                                                                                              --------           --------
<S>                                                                                           <C>                <C>
ASSETS
Current assets:
 Cash and cash equivalents (note 1(c) and 6)                                                  $  4,954           $  5,609
 Trade accounts receivable, net of allowance for doubtful accounts (note 3)                     13,875              6,662
 Other current assets (note 7)                                                                   1,846              1,421
                                                                                              --------           --------
  Total current assets                                                                          20,675             13,692

Purchased software, net (note 1(e))                                                                674              1,266
Capitalized software development costs, net (note 1(f))                                          3,097              2,425
Property and equipment, net (note 4)                                                             2,985              2,908
Excess of cost over net assets of businesses acquired, net (note 1(h) and 2)                    11,348              6,887
Other assets                                                                                        45                 89
                                                                                              --------           --------
  Total assets                                                                                $ 38,824           $ 27,267
                                                                                              ========           ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Current installments of long-term debt and obligations under capital leases (note 6)         $  6,269           $  6,363
 Accounts payable, principally trade                                                             1,807              1,211
 Accrued liabilities (note 5)                                                                    2,341              1,773
 Deferred revenue                                                                                4,889              4,583
                                                                                              --------           --------
  Total current liabilities                                                                     15,306             13,930

Obligations under capital leases, excluding current installments (note 6)                          151                254
Other long-term liabilities                                                                        167                 --
                                                                                              --------           --------
  Total liabilities                                                                             15,624             14,184
                                                                                              --------           --------

Series B Cumulative Convertible Exchangeable Preferred Stock; designated 550
   shares; 23 and 65 shares issued and outstanding at December 31, 2000 and
   1999, respectively; net of issuance costs (note 8)                                              152                348

Shareholders' equity (note 9):
 Preferred stock, without par value. Authorized 20,000 shares;
  designated Series A cumulative preferred stock 500 shares; issued none                            --                 --
 Common stock, $0.01 par value. Authorized 50,000 shares; 28,167 and 25,555
  issued and outstanding shares at December 31, 2000 and 1999, respectively                        282                256
 Additional paid-in capital                                                                     49,715             42,236
 Accumulated deficit                                                                           (26,949)           (29,757)
                                                                                              --------           --------
  Total shareholders' equity                                                                    23,048             12,735
                                                                                              --------           --------

Commitments (note 12)

Total liabilities and shareholders' equity                                                    $ 38,824           $ 27,267
                                                                                              ========           ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-2
<PAGE>   42


                  HEALTHCARE.COM CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                                              Years ended December 31,
                                                                                   ----------------------------------------------
                                                                                     2000               1999               1998
                                                                                   --------           --------           --------
<S>                                                                                <C>                <C>                <C>
Revenue (note 13):
 Software                                                                          $ 12,718           $  6,982           $ 12,432
 Services and other                                                                  35,595             18,333             14,752
                                                                                   --------           --------           --------
  Total revenue                                                                      48,313             25,315             27,184
                                                                                   --------           --------           --------

Cost of revenue:
 Software                                                                             1,693              1,343                852
 Services and other                                                                  22,939             10,193              7,102
                                                                                   --------           --------           --------
  Total cost of revenue                                                              24,632             11,536              7,954
                                                                                   --------           --------           --------

  Gross profit                                                                       23,681             13,779             19,230

Operating expenses:
 Sales and marketing                                                                  8,302              6,969              6,672
 Research and development                                                             4,272              4,047              3,882
 General and administrative                                                           6,047              5,545              5,747
 Provision for doubtful accounts                                                      1,200              5,195                270
 Merger costs (note 2)                                                                   --                 --              1,060
                                                                                   --------           --------           --------
  Operating earnings (loss)                                                           3,860             (7,977)             1,599

Interest expense                                                                     (1,108)              (529)              (254)
Interest income                                                                         190                 33                153
                                                                                   --------           --------           --------
  Earnings (loss) before income taxes                                                 2,942             (8,473)             1,498

Income taxes (note 7)                                                                   (79)                --                 --
                                                                                   --------           --------           --------

  Net earnings (loss)                                                                 2,863             (8,473)             1,498

Accretion of discount on Series B Preferred Stock                                       (32)               (17)                --
Series B Preferred Stock dividends                                                      (23)               (14)                --
                                                                                   --------           --------           --------

Net earnings (loss) attributable to common shareholders                            $  2,808           $ (8,504)          $  1,498
                                                                                   ========           ========           ========

Net earnings (loss) per share of common stock:
 Basic                                                                             $   0.10           $  (0.34)          $   0.06
                                                                                   ========           ========           ========
 Diluted                                                                           $   0.10           $  (0.34)          $   0.06
                                                                                   ========           ========           ========

Shares used in the calculation of net earnings (loss) per share of common
 stock:
 Basic                                                                               27,280             25,347             24,031
                                                                                   ========           ========           ========
 Diluted                                                                             28,119             25,347             24,867
                                                                                   ========           ========           ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>   43


                  HEALTHCARE.COM CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>

                                                       Common Stock       Additional                                     Total
                                                   -------------------     Paid-in       Deferred     Accumulated     Shareholders'
                                                   Shares       Amount     Capital     Compensation     Deficit          Equity
                                                   ------       ------    ----------   ------------   -----------     ------------
<S>                                                <C>           <C>         <C>          <C>          <C>              <C>
Balance at December 31, 1997                       23,563        $236        $38,280      $(73)        $(22,751)        $ 15,692
Issuance of common stock in satisfaction of
 investment banker advisory fee                       100           1            405        --               --              406
Issuance of common stock in satisfaction of
 note payable to a HUBLink shareholder                125           1            507        --               --              508
Stock options exercised                             1,092          11          1,491        --               --            1,502
Employee stock plan purchases                          92           1            140        --               --              141
Amortization of deferred compensation, net
 of forfeitures                                        --          --             --        73               --               73
Income tax benefits arising from stock
 option exercises                                      --          --            478        --               --              478
Net earnings                                           --          --             --        --            1,498            1,498
                                                   ------        ----        -------      ----         --------         --------
Balance at December 31, 1998                       24,972         250         41,301        --          (21,253)          20,298
Stock options exercised                               402           4            571        --               --              575
Employee stock plan purchases                         106           1            217        --               --              218
Exercise of warrants                                   75           1            103        --               --              104
Issuance of warrants in conjunction with
    obtaining loan                                     --          --             44        --               --               44
Accretion of discount on Series B
    Preferred Stock                                    --          --             --        --              (17)             (17)
Series B Preferred Stock dividends                     --          --             --        --              (14)             (14)
Net loss                                               --          --             --        --           (8,473)          (8,473)
                                                   ------        ----        -------      ----         --------         --------
Balance at December 31, 1999                       25,555         256         42,236        --          (29,757)          12,735
Stock options exercised                               356           3            556        --               --              559
Employee stock plan purchases                         166           2            337        --               --              339
Conversion of Series B Preferred Stock into
    common stock                                      198           2            226        --               --              228
Issuance of common stock in connection
    with an acquisition                             1,892          19          5,481        --               --            5,500
Issuance of warrants in connection with an
    acquisition                                        --          --            506        --               --              506
Issuance of warrants in conjunction with
    obtaining loans                                    --          --            142        --               --              142
Accretion of discount on Series B
    Preferred Stock                                    --          --             --        --              (32)             (32)
Series B Preferred Stock dividends                     --          --             --        --              (23)             (23)
Income tax benefits arising from stock
 option exercises                                      --          --            231        --               --              231
Net earnings                                           --          --             --        --            2,863            2,863
                                                   ------        ----        -------      ----         --------         --------
Balance at December 31, 2000                       28,167        $282        $49,715      $ --         $(26,949)        $ 23,048
                                                   ======        ====        =======      ====         ========         ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>   44


                  HEALTHCARE.COM CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                      Years ended December 31,
                                                                              -------------------------------------------
                                                                                2000             1999              1998
                                                                              -------           -------           -------
<S>                                                                           <C>               <C>               <C>
Cash flows from operating activities:
 Net earnings (loss)                                                          $ 2,863           $(8,473)          $ 1,498
 Adjustments to reconcile net earnings (loss) to net cash provided by
   (used in) operating activities:
    Provision for doubtful accounts                                             1,200             5,195               270
    Depreciation and amortization                                               2,469             2,065             1,493
    Amortization of excess of cost over net assets of businesses
       acquired                                                                 1,140               672               672
    Compensation related to stock options, net                                     --                --                73
    (Increase) decrease in trade accounts receivable                           (8,413)              889            (8,655)
    (Increase) decrease in other current assets                                  (131)               33              (104)
    Increase in trade accounts payable                                            596                85               413
    Increase (decrease) in accrued liabilities                                    140                70              (419)
    Increase (decrease) in deferred revenue                                       306              (107)            1,093
                                                                              -------           -------           -------
      Net cash provided by (used in) operating activities                         170               429            (3,666)
                                                                              -------           -------           -------

Cash flows from investing activities:
 Purchased software                                                               (48)              (51)             (112)
 Capitalized software development costs                                        (1,435)           (1,291)           (1,249)
 Capital expenditures                                                            (865)           (1,629)             (258)
 Change in other non-current assets and liabilities, net                           44                29              (210)
 Cash obtained in connection with an acquisition of business                    1,000                --                --
 Proceeds from disposition of business                                             --               650             1,517
                                                                              -------           -------           -------
    Net cash used in investing activities                                      (1,304)           (2,292)             (312)
                                                                              -------           -------           -------

Cash flows from financing activities:
 (Payment) proceeds from issuance of convertible note payable                  (3,000)            3,000                --
 Payments on long-term debt                                                      (396)             (417)           (3,797)
 Net borrowings under line of credit                                            3,000               508             1,522
 Proceeds from the sale of Series B Preferred Stock, net                           --               331                --
 Series B Preferred Stock dividends                                               (23)              (14)               --
 Proceeds from issuances of common stock                                          898               897             1,643
                                                                              -------           -------           -------
    Net cash provided by (used in) financing activities                           479             4,305              (632)
                                                                              -------           -------           -------

    Net (decrease) increase in cash and cash equivalents                         (655)            2,442            (4,610)

Cash and cash equivalents at beginning of year                                  5,609             3,167             7,777
                                                                              -------           -------           -------

Cash and cash equivalents at end of year                                      $ 4,954           $ 5,609           $ 3,167
                                                                              =======           =======           =======
</TABLE>

See accompanying notes to consolidated financial statements         (continued)


                                      F-5
<PAGE>   45


                  HEALTHCARE.COM CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                         Years ended December 31,
                                                                                  ------------------------------------------
                                                                                   2000              1999             1998
                                                                                  -------           -------          -------
<S>                                                                               <C>               <C>              <C>
Supplemental disclosures of cash paid for:

  Interest                                                                        $   777           $   529          $   254
                                                                                  =======           =======          =======

Supplemental disclosures of non-cash investing and financing activities:

  Equipment acquired under capital lease obligations                              $   199           $    --          $   844
                                                                                  =======           =======          =======


  Issuance of common stock in satisfaction of note payable
  to HUBLink shareholder                                                          $    --           $    --          $   508
                                                                                  =======           =======          =======

  Issuance of common stock in satisfaction of investment
  banker advisory fee                                                             $    --           $    --          $   406
                                                                                  =======           =======          =======

  Income tax benefits arising from stock option exercises                         $   231           $    --          $   478
                                                                                  =======           =======          =======

  Return of purchased software                                                    $    --           $   150          $    --
                                                                                  =======           =======          =======

  Issuance of warrants to purchase common stock in connection
  with obtaining loans                                                            $   142           $    44          $    --
                                                                                  =======           =======          =======

  Conversion of Series B Preferred Stock into common stock                        $   228           $    --          $    --
                                                                                  =======           =======          =======


         Accretion of discount on Series B Preferred Stock                        $    32           $    17          $    --
                                                                                  =======           =======          =======

Disposal of business:

 Assets disposed of                                                              $    --           $    --          $  2,445
 Liabilities disposed of                                                               --                --             (278)
 (Amount in) received from escrow                                                      --               650             (650)
                                                                                  -------           -------          -------
  Proceeds from disposition of a business                                         $    --           $   650          $ 1,517
                                                                                  =======           =======          =======

Acquisition of business:

 Excess of cost over net assets of business acquired                              $ 5,601           $    --          $    --
 Fair value of liabilities assumed                                                   (500)               --               --
 Fair value of common stock issued                                                 (5,500)               --               --
 Fair value of warrants issued                                                       (506)               --               --
 Expenses incurred in connection with the acquisition                                 (95)               --               --
                                                                                  -------           -------          -------
  Cash obtained in connection with an acquisition                                 $(1,000)          $    --          $    --
                                                                                  =======           =======          =======
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>   46


                  HEALTHCARE.COM CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998
            (IN THOUSANDS, EXCEPT PERCENTAGES AND PER SHARE AMOUNTS)

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)      Business

                  Healthcare.com Corporation (formerly HIE, Inc., "HIE") and
                  subsidiaries (collectively referred to as "Healthcare.com" or
                  the "Company") develops and markets technology products and
                  services that enable enterprises to securely access,
                  integrate, cleanse, index and extend data between
                  incompatible systems, both within and outside the
                  organization. In addition the Company offers solutions to
                  healthcare enterprises and healthcare application vendors
                  which allows them to outsource their integration or data
                  center functions. Healthcare.com's customers are focused
                  within the healthcare and state and local government markets.

                  The Company was incorporated in Georgia in June 1994 as
                  Healthdyne Information Enterprises, Inc., a wholly-owned
                  subsidiary of Healthdyne, Inc. In November 1995, Healthdyne,
                  Inc. distributed all of the outstanding shares of HIE common
                  stock in a spin-off. In October 1997, HIE redefined its
                  strategic direction to focus on providing software products
                  and services to support the enterprise-wide integration of
                  information. On April 10, 2000, the name of the Company was
                  changed from HIE, Inc. to Healthcare.com Corporation as part
                  of the Company's introduction of a new healthcare,
                  business-to-business product strategy to complement and
                  extend its existing enterprise-wide integration solution
                  business.

         (b)      Basis of Consolidated Financial Statement Presentation

                  The consolidated financial statements include the accounts of
                  the Company and its subsidiaries, as appropriate.

                  The consolidated financial statements have been prepared in
                  conformity with accounting principles generally accepted in
                  the United States of America. In preparing the consolidated
                  financial statements, management is required to make
                  estimates and assumptions that affect the reported amounts of
                  assets and liabilities as of the dates of the consolidated
                  balance sheets and income and expenses for the periods.
                  Actual results could differ from those estimates.

                  All significant intercompany balances and transactions have
                  been eliminated in consolidation.

         (c)      Cash and Cash Equivalents

                  Cash and cash equivalents consist of cash and short-term
                  investments with original maturities of three months or less.
                  Of the cash equivalents, $3,000 serves as collateral on one
                  of the Company's lines of credit (see notes 6 and 15).


                                      F-7
<PAGE>   47
                  HEALTHCARE.COM CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998
            (IN THOUSANDS, EXCEPT PERCENTAGES AND PER SHARE AMOUNTS)


         (d)      Revenue

                  Healthcare.com recognizes revenue from two primary sources,
                  software licenses and services. Revenue from software
                  licensing and support fees is recognized in accordance with
                  Statement of Position ("SOP") 97-2, Software Revenue
                  Recognition, SOP 98-9, Software Revenue Recognition with
                  Respect to Certain Transactions and Staff Accounting Bulletin
                  No. 101, Revenue Recognition in Financial Statements.
                  Accordingly, Healthcare.com recognizes software license
                  revenue when: (1) persuasive evidence of an arrangement
                  exists; (2) delivery has occurred; (3) the fee is fixed or
                  determinable; and (4) collectibility is probable.

                  Services revenue includes fees for product implementation and
                  integration services, outsourcing services including
                  facilities management and product development, software
                  support and maintenance services and education. Product
                  implementation and integration services are generally
                  provided under contracts with terms of less than one year.
                  Revenue is recognized as the work is performed or, in the
                  case of a fixed-fee contract, on a percentage-of-completion
                  basis, even though some services may be prepaid. The Company
                  provides customers the ability to outsource their integration
                  of software, application hosting and/or their information
                  technology facilities management. Facilities management
                  outsourcing arrangements are typically one year or longer
                  with a fixed monthly fee. Revenue is recognized monthly in
                  accordance with the fixed fee. Product development
                  outsourcing arrangements are typically one year or longer
                  with a fixed fee for which revenue is recognized on a
                  percentage-of-completion basis. Software support and
                  maintenance services are generally provided under one-year
                  renewable service contracts for a prepaid standard fee.
                  Revenue is recognized ratably on a straight-line basis over
                  the term of the contract. Education classes are provided for
                  a standard per-student charge and revenue is recognized as
                  the service is provided. Deferred revenue represents advance
                  payments or billings for software licenses, services, or
                  support in advance of revenue recognition.

         (e)      Purchased Software

                  Purchased software includes the cost of purchased integration
                  software tools and the cost of software acquired in
                  connection with business combinations. It also includes the
                  cost of licenses to use, embed and sell software tools
                  developed by others. These costs are being amortized ratably
                  based on the projected revenue associated with these
                  purchased or licensed tools and products or the straight-line
                  method over five years, whichever method results in a higher
                  level of annual amortization. Amortization expense related to
                  purchased software amounted to $640, $581 and $563 in 2000,
                  1999 and 1998, respectively. Accumulated amortization related
                  to purchased software totaled $2,571 and $1,931 at December
                  31, 2000 and 1999, respectively.


                                      F-8
<PAGE>   48


         (f)      Research and Development and Capitalized Software Development
                  Costs

                  Prior to the determination of technological feasibility for
                  software tools, research and development costs are expensed
                  as incurred. After determination of technological feasibility
                  and before the release of the software tools for general
                  availability, the development costs related to such tools are
                  capitalized. These costs are being amortized ratably based on
                  the projected revenue associated with these tools or the
                  straight-line method over five years, whichever method
                  results in a higher level of annual amortization. The Company
                  capitalized $1,435, $1,291 and $1,249 of software development
                  costs in 2000, 1999 and 1998, respectively. Amortization
                  expense related to capitalized software development costs was
                  $763, $472 and $207 in 2000, 1999 and 1998, respectively.
                  Accumulated amortization related to capitalized software
                  development costs totaled $1,564 and $801 at December 31,
                  2000 and 1999, respectively.

         (g)      Property and Equipment

                  Property and equipment are stated at cost less accumulated
                  depreciation and amortization. Depreciation is provided on
                  the straight-line method over estimated useful lives of three
                  to five years. Amortization of leasehold improvements is
                  recorded over the shorter of the lives of the related assets
                  or the lease terms and is included in depreciation expense.

         (h)      Excess of Cost Over Net Assets of Businesses Acquired

                  The excess of cost over net assets of businesses acquired
                  ("goodwill") is being amortized using the straight-line
                  method over periods ranging from 10 to 15 years. Amortization
                  expense related to acquired businesses amounted to $1,140 in
                  2000 and $672 in each of the years ended December 31, 1999
                  and 1998. At each balance sheet date, the Company assesses
                  the recoverability of this intangible asset by determining
                  whether the amortization of the goodwill balance over its
                  remaining life can be recovered through undiscounted future
                  operating cash flows of the acquired operation. The amount of
                  goodwill impairment, if any, is measured based on projected
                  discounted future operating cash flows using a discount rate
                  reflecting the Company's average cost of funds. Accumulated
                  amortization related to goodwill totaled $4,423 and $3,283 at
                  December 31, 2000 and 1999, respectively.

         (i)      Long-Lived Assets and Long-Lived Assets to be Disposed of

                  The Company accounts for long-lived assets in accordance with
                  the provisions of Statement of Financial Accounting Standards
                  ("SFAS") 121, Accounting for the Impairment of Long-Lived
                  Assets and for Long-Lived Assets to be Disposed of. This
                  statement requires that long-lived assets and certain
                  identifiable intangibles be reviewed for impairment whenever
                  events or changes in circumstances indicate that the carrying
                  amount of an asset may not be recoverable. Recoverability of
                  assets to be held and used is measured by a comparison of the
                  carrying amount of an asset to future net cash flows expected
                  to be generated by the asset. If such assets are considered
                  to be


                                      F-9
<PAGE>   49


                  impaired, the impairment to be recognized is measured by the
                  amount by which the carrying amount of the assets exceeds the
                  fair value of the assets. Assets to be disposed of are
                  reported at the lower of the carrying amount or fair value
                  less costs to sell.

         (j)      Stock Option Plans

                  The Company accounts for its stock option plans in accordance
                  with the provisions of Accounting Principles Board ("APB")
                  Opinion No. 25, Accounting for Stock Issued to Employees, and
                  related interpretations. As such, compensation expense to be
                  recognized over the related vesting period is generally
                  determined on the date of grant only if the current market
                  price of the underlying stock exceeds the exercise price.
                  SFAS 123, Accounting for Stock-Based Compensation, permits
                  entities to recognize as expense over the vesting period the
                  fair value of all stock-based awards on the date of grant.
                  Alternatively, SFAS 123 allows entities to continue to apply
                  the provisions of APB Opinion No. 25 and provide pro forma
                  net earnings (loss) and pro forma earnings (loss) per share
                  disclosures for employee stock option grants as if the
                  fair-value-based method defined in SFAS 123 had been applied.
                  The Company has elected to continue to apply the provisions
                  of APB Opinion No. 25 and provide the pro forma disclosures
                  required by SFAS 123 (see note 9).

         (k)      Income Taxes

                  The Company accounts for income taxes using the asset and
                  liability approach in accordance with SFAS 109, Accounting
                  for Income Taxes. Under SFAS 109, deferred income taxes are
                  recognized for the tax consequences of "temporary
                  differences" by applying enacted statutory tax rates
                  applicable to future years to differences between the
                  financial statement carrying amounts and the tax bases of
                  existing assets and liabilities. Additionally, the effect on
                  deferred taxes of a change in tax rates is recognized in
                  earnings in the period that includes the enactment date.

         (l)      Net Earnings (Loss) Per Share of Common Stock

                  The Company has presented net earnings (loss) per share
                  pursuant to SFAS 128, Earnings Per Share, which prescribes
                  the calculation methodology and financial reporting
                  requirements for basic and diluted earnings per share. Basic
                  earnings (loss) per common share available to common
                  shareholders are based on the weighted average number of
                  common shares outstanding. Diluted earnings (loss) per common
                  share available to common shareholders are based on the
                  weighted average number of common shares outstanding and
                  dilutive potential common shares, such as dilutive stock
                  options, determined using the treasury stock method.

         (m)      Operating Segments

                  The Company has presented its operating segments in
                  accordance with SFAS 131, Disclosures about Segments of an
                  Enterprise and Related Information. The Company's reportable
                  segments are strategic business units that offer different
                  products and services. Beginning January 1, 2000, the Company
                  operates in two segments: (i)


                                     F-10
<PAGE>   50


                  the licensing of integration software products and
                  performance of related integration services ("Software and
                  Services") and (ii) services provided by the Company that
                  allow enterprises to outsource their information technology,
                  integration and application functions to Healthcare.com
                  ("Solution Sourcing"). During 1999, the Company operated in
                  only the Software and Services segment. During 1998, the
                  Company operated in two different segments including Software
                  and Services and providing consulting services related to
                  information systems integration for healthcare organizations
                  ("Consulting") (see note 14).

         (n)      Comprehensive Income

                  No statement of comprehensive income has been included in the
                  accompanying financial statements since the Company has no
                  other comprehensive income.

         (o)      Reclassifications

                  Certain 1999 and 1998 amounts have been reclassified to
                  conform to the classifications presented in the 2000
                  financial statements.

2.       ACQUISITIONS AND DISPOSITIONS

         Integrated Solutions Division of Thermo Information Solutions, Inc.

         On March 13, 2000 (the "closing date"), the Company signed an
         agreement, effective as of February 25, 2000, to purchase certain
         service contracts, $1,000 cash and certain liabilities of the
         Integrated Solutions Division ("ISD") of Thermo Information Solutions,
         Inc. ("Thermo"). ISD, based in Charleston, South Carolina, designs,
         implements and manages information technology solutions. The purchase
         price consisted of 1,307 shares of the Company's common stock, and a
         warrant to purchase an additional 261 shares of the Company's common
         stock at any time on or before March 13, 2004 at an exercise price of
         $4.207 per share. On the closing date, the fair value of the common
         stock issued was $5,500, determined by calculating the average closing
         price of the common stock several days before and after the closing
         date and applying a discount related to certain restrictions on the
         common stock. The discount applied to the calculated value of common
         stock issued in this transaction is supported by an independent
         valuation. The value of the warrant was $506 on the closing date,
         determined using the Black-Scholes option-pricing model. Thermo had a
         one-time right, exercisable at any time on or before September 14,
         2000, subject to certain limitations, to receive additional shares of
         Healthcare.com common stock in the event that the average trading
         price of Healthcare.com common stock during the 10-day trading period
         prior to its election was below $4.207 per share. On July 14, 2000,
         Thermo exercised this right, resulting in the issuance of 585
         additional shares of Healthcare.com common stock. As part of the
         transaction, the Company received $1,000 in cash for working capital
         purposes from Thermo. The acquisition was accounted for using the
         purchase method of accounting with the results of operations of the
         business acquired included in the Company's results of operations from
         the effective date of the transaction. The acquisition resulted in
         acquired net assets of approximately $500


                                     F-11
<PAGE>   51


         (including the cash obtained of $1,000) and excess of cost over net
         assets acquired of approximately $5,601, which is being amortized over
         a 10-year life.

         The following unaudited pro forma financial information presents the
         combined results of operations of Healthcare.com and ISD as if the
         acquisition had occurred as of the beginning of each period presented,
         after giving effect to certain adjustments, including the amortization
         of goodwill. The pro forma financial information does not necessarily
         reflect the results of operations that would have occurred had
         Healthcare.com and ISD constituted a single entity during the years
         ended December 31, 2000 and 1999.


<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                       ----------------------------------
                                                                          2000                     1999
                                                                       ----------                --------

<S>                                                                    <C>                       <C>
Revenue                                                                $   51,756                $ 42,497
                                                                       ==========                ========

Net earnings (loss) attributable to common shareholders                $    2,975                $ (8,652)
                                                                       ==========                ========

Net earnings (loss) per share of common stock                          $     0.10                $  (0.32)
                                                                       ==========                ========
</TABLE>


         Integrated Services Group

         On December 31, 1998, the Company disposed of assets comprising its
         Integrated Services Group ("ISG") to Superior Consulting Company,
         Inc., a wholly-owned subsidiary of Superior Consultant Holdings
         Corporation, in exchange for cash of $2,200, of which $650 was held in
         escrow until certain conditions were met. The amount in escrow was
         released on December 31, 1999, and the Company was relieved of all
         obligations. ISG provided consulting services related to information
         systems integration for healthcare organizations. ISG comprised
         approximately 12.3% of the Company's revenue in 1998 (see note 14).
         There was no gain or loss resulting from this disposal.

         HUBLink, Inc.

         In May 1998, the Company issued 2,900 shares of its common stock in
         exchange for all outstanding common stock of HUBLink, Inc. ("HUBLink")
         of Columbus, Ohio, an integration software tool company. This business
         combination was accounted for as a pooling-of-interests combination.
         Merger costs totaling $1,060 resulting from the Company's acquisition
         of HUBLink include investment banking fees, legal and accounting


                                     F-12
<PAGE>   52


         fees, travel and severance costs. The financial position and results
         of operations of the Company have been restated for all periods prior
         to the merger to give retroactive effect to the merger.

3.       TRADE ACCOUNTS RECEIVABLE

         Trade accounts receivable is net of an allowance for doubtful accounts
         as follows:


<TABLE>
<CAPTION>
                                                              December 31,
                                                    -------------------------------
                                                      2000                   1999
                                                    -------                -------

<S>                                                 <C>                    <C>
Trade accounts receivable                           $19,170                $11,822
Less allowance for doubtful accounts                  5,295                  5,160
                                                    -------                -------

Trade accounts receivable, net                      $13,875                $ 6,662
                                                    =======                =======
</TABLE>


4.       PROPERTY AND EQUIPMENT

         Property and equipment are summarized as follows:


                                     F-13
<PAGE>   53


<TABLE>
<CAPTION>
                                                                      December 31,
                                                              ----------------------------
                                                               2000                  1999
                                                              ------                ------

<S>                                                           <C>                   <C>
Machinery and equipment                                       $3,733                $3,027
Furniture and fixtures                                         1,018                   927
Equipment under capital leases                                 2,021                 1,822
Leasehold improvements                                           206                   138
                                                              ------                ------
                                                               6,978                 5,914
Less accumulated depreciation and amortization                 3,993                 3,006
                                                              ------                ------

  Net property and equipment                                  $2,985                $2,908
                                                              ======                ======
</TABLE>


5.       ACCRUED LIABILITIES

         Accrued liabilities are summarized as follows:


<TABLE>
<CAPTION>
                                                   December 31,
                                           ----------------------------
                                            2000                  1999
                                           ------                ------

<S>                                        <C>                   <C>
Benefits and compensation                  $  686                $  625
Project completion costs                      144                   444
Other                                       1,511                   704
                                           ------                ------

  Total accrued liabilities                $2,341                $1,773
                                           ======                ======
</TABLE>



                                     F-14
<PAGE>   54
6.     LONG-TERM DEBT

       Long-term debt consists of the following:


<TABLE>
<CAPTION>
                                                                       December 31,
                                                                    ------------------
                                                                     2000        1999
                                                                    ------      ------
<S>                                                                 <C>         <C>
Lines of credit (see below)                                         $6,000      $3,000
Convertible note payable, net of unaccreted discount of $42 at
   December 31, 1999 (see below)                                        --       2,958
Obligations under capital leases - equipment leases; interest
ranging from 9% to 17% with various monthly payments and
maturing at various dates through September 1, 2003                    420         659
                                                                    ------      ------
                                                                     6,420       6,617

Less current installments                                            6,269       6,363
                                                                    ------      ------
Long-term debt, excluding current installments                      $  151      $  254
                                                                    ======      ======
</TABLE>

       Approximate aggregate minimum annual payments due on long-term debt and
       capital leases subsequent to December 31, 2000 are as follows: 2001,
       $6,269; 2002, $97; and 2003, $54.

       On December 31, 1999, the Company entered into a one-year Amended and
       Restated Loan and Security Agreement with Silicon Valley Bank (the
       "Bank"), which provides for a revolving line of credit up to $3,000 (the
       "$3,000 LOC") subject to borrowing base limitations. The borrowing base
       is the lesser of (i) the balance of the $3,000 LOC, or (ii) 100% of the
       cash equivalent balance held as collateral for the line of credit. The
       $3,000 LOC bears interest at the Bank's prime rate (9.5% at December 31,
       2000). On December 22, 2000, the $3,000 LOC was modified to extend the
       maturity date to January 25, 2001, and the balance outstanding under the
       $3,000 LOC was $3,000 at December 31, 2000 (see note 15).

       On February 24, 2000, the Company entered into an Accounts Receivable
       Financing Agreement (the "Agreement") with the Bank, which provided for
       an extension of credit in order to finance receivables up to $6,000. On
       December 20, 2000, this Agreement was terminated (see note 9).


                                      F-15
<PAGE>   55

       On December 20, 2000, the Company entered into a $7,000 revolving line of
       credit (the "$7,000 LOC") with the Bank, of which $4,551 was available
       for borrowing under the borrowing base limitation at December 31, 2000.
       The balance outstanding under the $7,000 LOC was $3,000 on December 31,
       2000. The $7,000 LOC provides for borrowings bearing interest at the
       Bank's prime rate plus 1.5% (11% at December 31, 2000) is secured by the
       Company's assets, including intellectual property, and expires on
       December 19, 2001 (see note 9).

       On December 21, 1999, the Company entered into a convertible note and
       warrant purchase agreement with Cybear, Inc., pursuant to which the
       Company obtained a $3,000 working capital loan with interest payable
       quarterly at a rate of 7.8% per annum, with the principal payable on
       December 21, 2000. The convertible note was paid in full on December 21,
       2000. The warrant purchase agreement entitles Cybear, Inc. to purchase 47
       shares of the Company's common stock at any time before December 21,
       2004, at an exercise price of $3.19 per share (see note 9).

7.     INCOME TAXES

       The provision for income taxes includes income taxes currently payable
       and those deferred because of temporary differences between the financial
       statement and tax bases of assets and liabilities that will result in
       taxable or deductible amounts in the future and any increase or decrease
       in the valuation allowance for deferred income tax assets.

       A reconciliation of the expected income tax (expense) benefit (based on
       the U.S. Federal statutory rate of 35%) to the actual income tax
       (expense) benefit is as follows:

<TABLE>
<CAPTION>
                                                               Years ended December, 31
                                                           ---------------------------------
                                                             2000          1999        1998
                                                           -------       -------       -----
<S>                                                        <C>           <C>           <C>
Computed expected income tax (expense)
 benefit                                                   $(1,030)      $ 2,966       $(524)
Goodwill amortization and other permanent differences         (279)         (261)       (261)
Utilization of prior year financial
 statement losses                                            1,011            --         367
Decrease (increase) in valuation allowance                     283        (2,705)        416
Other                                                          (64)           --           2
                                                           -------       -------       -----
    Total income tax expense                               $   (79)      $    --       $  --
                                                           =======       =======       =====
</TABLE>

       The tax effects of temporary differences that give rise to significant
portions of the deferred tax asset are as follows:


                                      F-16
<PAGE>   56

<TABLE>
<CAPTION>
                                                                  December, 31
                                                              ---------------------
                                                                2000          1999
                                                              -------       -------
<S>                                                           <C>           <C>
Deferred tax assets (liabilities):
 Allowance for doubtful accounts                              $ 1,783       $ 1,806
 Accruals and reserves not deducted for tax purposes               42            26
 Depreciation and amortization                                   (370)         (293)
 Net operating loss carryforwards                               7,187         8,198
 Tax credit carryforwards                                         233           256
 Alternative minimum tax credit                                    55            --
                                                              -------       -------
  Total gross deferred tax asset                                8,930         9,993

Less valuation allowance                                        8,221         9,515
                                                              -------       -------

  Net deferred tax asset, included in other current assets    $   709       $   478
                                                              =======       =======
</TABLE>

         Under SFAS 109, deferred income tax assets and liabilities are
         recognized for differences between the financial statement carrying
         amounts and the tax bases of assets and liabilities which will result
         in future deductible or taxable amounts and for net operating loss and
         tax credit carryforwards. A valuation allowance is then established to
         reduce the deferred income tax assets to the level at which it is "more
         likely than not" that any tax benefits will be realized. Realization of
         tax benefits of deductible temporary differences and operating loss and
         tax credit carryforwards depends on having sufficient taxable income
         within the carryback and carryforward periods. Sources of taxable
         income that may allow for the realization of tax benefits include (1)
         taxable income in the current year or prior years that is available
         through carryback, (2) future taxable income that will result from the
         reversal of existing taxable temporary differences, and (3) future
         taxable income generated by future operations. The valuation allowance
         for deferred income tax assets at December 31, 2000 and 1999 was $8,221
         and $9,515, respectively. The net (decrease) increase in the valuation
         allowance for deferred income tax assets for the years ended December
         31, 2000 and 1999 was $($1,294) and $3,349, respectively. Based on the
         level of historical taxable income and projections for future taxable
         income over the periods in which the deferred tax assets are
         deductible, management believes it is more likely than not the Company
         will realize the benefits of the deferred tax assets, net of existing
         valuation allowances at December 31, 2000.


                                      F-17
<PAGE>   57

         At December 31, 2000, the Company had the following estimated credits
         and net operating loss carryforwards available for Federal income tax
         reporting purposes to be applied against future taxable income and tax
         liabilities:

<TABLE>
<CAPTION>
                                                               Net
                                                Tax         operating
               Year of expiration             credits         loss
              --------------------          -----------    -----------
              <S>                           <C>            <C>
                      2007                   $     3        $    --
                      2008                        38             --
                      2009                        --            265
                      2010                        49          1,938
                      2011                        34          7,160
                      2012                       109          5,616
                      2018                        --            777
                      2019                        --          4,778
                                             -------        -------
                                             $   233        $20,534
                                             =======        =======
</TABLE>

       The net operating loss carryforward of $20,534 includes deductions of
       approximately $5,788 related to the exercise of stock options, which will
       be credited to additional paid-in capital when recognized. The
       alternative minimum tax net operating loss carryforward approximates the
       regular net operating loss carryforward. A portion of the net operating
       loss (approximately $7,416) is limited by Section 382 of the Internal
       Revenue Code of 1986, as amended, to an annual utilization of
       approximately $749.

8.     REDEEMABLE PREFERRED STOCK

       On September 29, 1999, the Company sold 65 shares of a newly designated
       8.5% Series B Cumulative Convertible Exchangeable Preferred Stock
       ("Series B Preferred Stock") to individuals in a private placement for
       gross proceeds of $650. The Series B Preferred Stock has a $10.00 per
       share liquidation value and provides for 8.5% cumulative annual
       dividends, payable quarterly in arrears beginning on December 31, 1999.
       The Series B Preferred Stock is convertible at any time into the
       Company's common stock determined by dividing (1) $10.00 by (2) $2.1491
       (115% of the average of the closing bid prices of the common stock for
       the five business days prior to the closing date). The Series B Preferred
       Stock is exchangeable at the Company's option into subordinated notes
       with substantially equal terms. The Series B Preferred Stock has a
       mandatory redemption at 25% of the originally issued shares of Series B
       Preferred Stock on annual redemption dates beginning on September 30,
       2002. During 2000, 42 shares of the 65 originally issued shares of Series
       B Preferred Stock were converted into 198 shares of common stock. The
       Series B Preferred Stock is net of unamortized financing costs of $72 and
       $302 at December 31,


                                      F-18
<PAGE>   58

       2000 and 1999, respectively. The financing costs are being accreted
       over the term of the Series B Preferred Stock.

9.     SHAREHOLDERS' EQUITY

       Warrants

       In connection with the acquisition of ISD (see note 2), Healthcare.com
       issued a warrant to purchase 261 shares of the Company's common stock at
       any time on or before March 13, 2004 at an exercise price of $4.207 per
       share. The fair market value of the warrant was $506 on the grant date,
       determined using the Black-Scholes option-pricing model. This amount was
       recorded as additional paid-in capital and an addition to excess of cost
       over net assets of businesses acquired. The warrant remains outstanding
       at December 31, 2000.

       In connection with obtaining an Accounts Receivable Financing Agreement
       with the Bank (see note 6), the Company issued a Stock Purchase Warrant
       to the Bank, which entitles the holder to purchase 62 shares of the
       Company's common stock at any time on or before February 23, 2005 at an
       exercise price of $4.875 per share. The fair market value of the warrant
       was $128 on the grant date and was amortized as interest expense over the
       term of the agreement. The warrant remains outstanding at December 31,
       2000.

       In conjunction with obtaining the $7,000 revolving line of credit with
       the Bank (see note 6), the Company issued a Stock Purchase Warrant to the
       Bank which entitles the holder to purchase 25 shares of the Company's
       common stock at any time on or before December 20, 2005 at an exercise
       price of $1.31 per share. The fair market value of the warrant was $14 on
       the grant date and is being amortized as interest expense over the term
       of the line of credit. The warrant remains outstanding at December 31,
       2000.

       In connection with entering into the Convertible Note and Warrant
       Purchase Agreement with Cybear, Inc. (see note 6), the Company issued
       warrants to purchase 47 shares of the Company's common stock at any time
       before December 21, 2004. The fair market value of the warrants was $44
       on the grant date and was amortized as interest expense over the term of
       the note. All 47 warrants remain outstanding as of December 31, 2000.

       On December 31, 1997, Healthcare.com issued warrants to purchase 50
       shares of Healthcare.com common stock, at $1.59 per share, to Massey
       Burch. In January 1999, Massey Burch exercised the warrants to purchase
       42 shares of Healthcare.com common stock.

       On May 12, 1998, Healthcare.com issued a warrant to purchase 33 shares of
       the Company's common stock at $3.15 per share in exchange for the
       cancellation of warrants to purchase shares of HUBLink common stock. The
       warrant was exercised in December 1999.


                                      F-19
<PAGE>   59

       Stock Option Plans

       The Company maintains four stock option plans for the benefit of
       employees and directors. A total of 4,167 shares of the Company's common
       stock are reserved for future issuance under these plans. Most of the
       stock options granted under these plans are exercisable in equal amounts
       over three years and expire in six to ten years. Other terms of options
       granted under the plans are determined by the Stock Option Committee of
       the Company's Board of Directors, subject to the terms of the respective
       plans.

       The per share weighted-average fair values of stock options granted
       during 2000, 1999 and 1998 were $2.27, $1.43 and $1.20, respectively, on
       the date of grant using the Black-Scholes option-pricing model with the
       following assumptions:


<TABLE>
<CAPTION>
                                       2000         1999         1998
                                    ---------    ---------    ---------
<S>                                 <C>          <C>          <C>
Expected volatility                      90%          46%          44%
Expected dividend yield                none         none         none
Risk-free interest rate                5.00%        6.00%        5.30%
Expected life of stock options      5 years      5 years      5 years
</TABLE>

       The Company applies APB Opinion No. 25 in accounting for its stock option
       plans. Accordingly, no compensation cost is recognized for its stock
       options in the consolidated financial statements, unless the stock
       options are granted at an exercise price below fair value at the grant
       date, in which case the difference between the exercise price and the
       fair value is recorded as deferred compensation cost and amortized over
       the relevant period of benefit. Had the Company determined compensation
       cost based on the fair value at the grant date for its stock options
       under SFAS 123, the Company's reported net earnings (loss) and related
       per share amounts would have been changed to the pro forma amounts
       indicated below:

<TABLE>
<CAPTION>
                                                                 2000           1999            1998
                                                              ---------      ---------       ---------
<S>                                                           <C>            <C>             <C>
Net earnings (loss) attributable to common shareholders:
  As reported                                                 $   2,808      $  (8,504)      $   1,498
  Pro forma                                                       1,695         (9,231)            649
Diluted net earnings (loss) per share:
  As reported                                                 $    0.10      $   (0.34)      $    0.06
  Pro forma                                                   $    0.06          (0.36)           0.03
</TABLE>


                                      F-20
<PAGE>   60

A summary of stock option transactions under these plans during 2000, 1999 and
1998 is shown below:

<TABLE>
<CAPTION>
                                                                       Option price per share
                                                                     --------------------------
                                                       Number                          Weighted
                                                      of shares          Range          average
                                                      ---------      -------------     --------
<S>                                                   <C>            <C>               <C>
Options outstanding at December 31, 1997                3,491        $0.23 - $5.88       $2.21
   Granted                                              1,240        $2.00 - $3.95       $2.60
   Exercised                                           (1,092)       $0.23 - $4.47       $1.38
   Canceled or expired                                 (1,167)       $1.50 - $5.50       $3.20
                                                        -----
Options outstanding at December 31, 1998                2,472        $0.23 - $5.88       $2.27
   Granted                                              1,205        $2.11 - $8.03       $2.98
   Exercised                                             (402)       $0.23 - $4.47       $1.43
   Canceled or expired                                   (340)       $0.27 - $5.88       $3.09
                                                        -----
Options outstanding at December 31, 1999                2,935        $0.25 - $8.03       $2.59
   Granted                                              1,392        $1.34 - $5.91       $3.13
   Exercised                                             (356)       $0.25 - $4.47       $1.57
   Canceled or expired                                   (205)       $0.56 - $8.03       $3.23
                                                        -----
Options outstanding at December 31, 2000                3,766        $1.34 - $8.03       $2.84
                                                        =====

Options exercisable at December 31, 1998                1,303        $0.23 - $5.88       $1.85
                                                        =====

Options exercisable at December 31, 1999                1,035        $0.25 - $5.88       $2.23
                                                        =====

Options exercisable at December 31, 2000                1,541        $1.50 - $8.03       $2.58
                                                        =====
</TABLE>

The following table summarizes information about stock options outstanding and
exercisable at December 31, 2000:

<TABLE>
<CAPTION>
                                         Options outstanding                 Options exercisable
                              ----------------------------------------    -------------------------
                                             Weighted
                                              average        Weighted                     Weighted
                                Number       remaining        average        Number       average
         Range of            outstanding    contractual      exercise     exercisable     exercise
      exercise prices        at 12/31/00   life (months)       price      at 12/31/00      price
     -----------------       -----------   -------------     ---------    -----------    ----------
     <S>                     <C>           <C>               <C>          <C>            <C>
       $1.34 - $2.03              1,390         60             $1.92           663          $1.82
       $2.11 - $2.88              1,090         80             $2.55           536          $2.60
       $3.16 - $3.95              1,001         83             $3.67           246          $3.59
       $4.44 - $8.03                285         94             $5.52            96          $5.16
                                  -----                                      -----

                                  3,766         74             $2.84         1,541          $2.58
                                  =====                                      =====
</TABLE>


                                      F-21
<PAGE>   61

       Non-Employee Directors Stock Plan

       On October 20, 1995, the Company established a stock plan for
       non-employee directors whereby such directors may elect to receive all or
       a portion of their annual retainer fee in unrestricted shares of the
       Company's common stock. This plan was terminated in 2000.

       Stock Purchase Plan

       The Company maintains an employee stock purchase plan for all eligible
       employees of the Company. Participants may use up to 10% of their
       compensation to purchase the Company's common stock through payroll
       deductions for 85% of the lower of the beginning or ending stock price on
       a quarterly basis. There are 440 shares of the Company's common stock
       reserved for future issuances under this plan, and 166 shares, 106 shares
       and 92 shares were issued during the years ended December 31, 2000, 1999
       and 1998, respectively.

       Shareholder Rights Plan

       On October 20, 1995, the Company's Board of Directors declared a dividend
       distribution of one purchase right for each share of the Company's common
       stock outstanding as of October 30, 1995. If a person or group acquires
       beneficial ownership of 15% or more of the Company's outstanding common
       stock or announces a tender offer or exchange that would result in the
       acquisition of a beneficial ownership right of 20% or more of the
       Company's outstanding common stock, the rights detach from the common
       stock and are distributed to shareholders as separate securities. Each
       right entitles its holder to purchase one one-hundredth of a share (a
       unit) of Series A Cumulative Preferred Stock, at a purchase price of $50
       per unit. The rights, which do not have voting power, expire on October
       23, 2005 unless previously distributed and may be redeemed by the Company
       in whole at a price of $.01 per right at any time before and within 10
       days after their distribution. If the Company is acquired in a merger or
       other business combination transaction, or 50% of its assets or earnings
       power are sold at any time after the rights become exercisable, the
       rights entitle a holder to buy a number of common shares of the acquiring
       company having a market value of twice the exercise price of the right.
       If a person acquires 20% of the Company's common stock or if a 15% or
       larger holder merges with the Company and the common stock is not changed
       or exchanged in such merger, or engages in self-dealing transactions with
       the Company, each right not owned by such holder becomes exercisable for
       the number of common shares of the Company having a market value of twice
       the exercise price of the right.


                                      F-22
<PAGE>   62

10.    EMPLOYEE BENEFIT PLANS

       Prior to July 1, 1998, the Company and certain of its subsidiaries
       maintained 401(k) defined contribution plans for the benefit of their
       employees. Effective July 1, 1998, these plans were merged and the
       Company adopted the Healthcare.com Corporation 401(k) Savings and Profit
       Sharing Plan for the benefit of all eligible employees of the Company.
       The Company may make discretionary matching contributions up to the
       maximum allowed under IRS regulations. The discretionary matching
       contributions vest 100% upon the completion of two years of service. For
       the years ended December 31, 2000, 1999 and 1998, the Company made
       discretionary matching contributions of $426, $257 and $212,
       respectively, to the various plans.

11.    FAIR VALUE OF FINANCIAL INSTRUMENTS

       The Company uses financial instruments in the normal course of its
       business. The carrying values of cash equivalents, accounts receivable,
       accounts payable, and deferred revenue approximate fair value due to the
       short-term maturities of these assets and liabilities. The Company
       estimates that the carrying amounts of the Company's long-term debt
       approximates the fair value based on the current rates offered to the
       Company for debt of the same remaining maturities.

12.    COMMITMENTS

       The Company is committed under non-cancelable operating lease and capital
       lease agreements for facilities and equipment which expire at various
       dates through 2006. The future minimum annual lease payments under these
       leases are summarized as follows:


                                      F-23
<PAGE>   63

<TABLE>
<CAPTION>
                                                                          Capital
                                                          Operating        Leases
               Year ending December 31,                     Leases      (see note 6)
              --------------------------                 -----------   --------------
              <S>                                        <C>           <C>
                          2001                              $1,523          $ 302
                          2002                               1,257            109
                          2003                                 858             60
                          2004                                 818             --
                          2005                                 836             --
                       Thereafter                               70             --
                                                            ------          -----
                                                            $5,362            471
                                                            ======


                      Less interest                                            51
                                                                            -----

                      Present value of future minimum
                      capital lease payments                                $ 420
                                                                            =====
</TABLE>

       Rental expense for operating leases (excluding those with lease terms of
       a month or less that were not renewed) was $1,535, $1,429 and $962 in
       2000, 1999 and 1998, respectively.

13.    MAJOR CUSTOMERS AND DISTRIBUTORS

       Individually, two customers exceeded 10% of the Company's total revenue
       for the year ended December 31, 2000. Together, these two customers
       represented 33% of total revenue and 45% of service revenue for the year
       ended December 31, 2000. The accounts receivable balance from these two
       customers combined was approximately $3,241 on December 31, 2000. No
       single distributor or customer accounted for more than 10% of the
       Company's revenue in 1999. One distributor accounted for 18% of the
       Company's total revenue and 40% of its software revenue in 1998. Revenue
       from international sales was less than 10% of the Company's revenue in
       each of 2000, 1999 and 1998.


                                      F-24
<PAGE>   64

14.    SEGMENT INFORMATION

       The Company's reportable segments are strategic business units that offer
       different products and services. Beginning January 1, 2000, the Company
       operates in two segments: (i) the licensing of integration software
       products and performance of related integration services ("Software and
       Services") and (ii) services provided by the Company that allow
       enterprises to outsource their information technology, integration and
       application functions to Healthcare.com ("Solution Sourcing"). Prior to
       2000, the Solution Sourcing business did not separately exist. The
       significant portion of the Solution Sourcing business was added upon the
       acquisition of ISD (see note 2). During 1999, the Company operated in
       only the Software and Services segment. During 1998, the Company operated
       in two segments: (i) the licensing of integration software products and
       performance of related integration services ("Software and Services") and
       (ii) the providing of consulting services related to information systems
       integration for healthcare organizations ("Consulting"). On December 31,
       1998, the Consulting business was sold (see note 2). The Company
       evaluates performance of the segments during 2000 based on revenue and
       gross profit of the segments. During 1998, the Company evaluated
       performance of the segments based on revenues and operating earnings
       (loss) of the segments. The Company does not allocate assets to
       reportable segments. The accounting policies of the segments are the same
       as those described in note 1. Segment information for the years ended
       December 31, 2000 and 1998 is as follows:


                                      F-25
<PAGE>   65

<TABLE>
<CAPTION>
                                                2000
                                              --------
         <S>                                  <C>
         Revenue:
           Software and Services              $ 29,653
           Solution Sourcing                    18,660
                                              --------
             Total revenue                    $ 48,313
                                              ========

         Gross Profit:
           Software and Services              $ 19,745
           Solution Sourcing                     3,936
                                              --------
             Total gross profit               $ 23,681
                                              ========



                                                1998
                                              --------
         Revenue:
           Software and Services              $ 23,830
           Consulting                            3,354
                                              --------
            Total revenue                     $ 27,184
                                              ========

         Operating earnings (loss):
           Software                           $  2,059
           Consulting                             (460)
                                              --------
            Operating earnings                $  1,599
                                              ========
</TABLE>


15.    SUBSEQUENT EVENT

On January 25, 2001, the Company paid in full the $3,000 LOC from the Bank which
matured on that date (see note 6).


                                      F-26
<PAGE>   66
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The section of the Company's Proxy Statement for the 2001 Annual
Meeting of Shareholders (the "2001 Proxy Statement") captioned "Proposal 1.
Election of Directors" identifies members of the Board of Directors of the
Company and nominees, and is incorporated in this Item 10 by reference.

                      EXECUTIVE OFFICERS OF THE REGISTRANT

         The following persons are the current executive officers of
Healthcare.com. Certain information as of December 31, 2000 relating to the
executive officers, which has been furnished to Healthcare.com by the
individuals named, is set forth below.

<TABLE>
<CAPTION>
         NAME                              AGE             POSITION
         ----                              ---             --------

         <S>                               <C>    <C>
         Robert I. Murrie                  55     President, Chief Executive Officer and Director

         Joseph A. Blankenship             31     Senior Vice President, Chief Financial Officer,
                                                  Treasurer and Assistant Secretary

         Michael T. McGuire                51     Senior Vice President, Chief Operating Officer

         Shannon Bradshaw Hodges           40     Senior Vice President, Marketing

         Deborah L. Dean                   33     Senior Vice President, e-Business

         Leslie Jones                      44     Senior Vice President, General Counsel and
                                                  Secretary

         Lisa M. Maguire                   30     Vice President, Controller, Chief Accounting
                                                  Officer, Assistant Treasurer and Assistant
                                                  Secretary
</TABLE>

         Robert I. Murrie has served as a director and the President and Chief
Executive Officer of Healthcare.com since October 1997. He was President of
Healthcare Communications, Inc., a wholly-owned subsidiary of Healthcare.com,
from April 1997 to October 1997 and served as a Client Partner of Healthcare.com
(a senior sales executive position) from January 1996 to April 1997. Prior to
joining Healthcare.com, Mr. Murrie served as President and Chief Executive
Officer of Nurse on Call, a managed care service company, from 1992 to December
1995 and held several senior executive positions at HBO & Company from 1985 to
1992, including President and Chief Executive Officer of Healthquest, Inc., a
wholly-owned subsidiary of HBO & Company, from 1988 to 1992.

         Joseph A. Blankenship has served as Senior Vice President, Chief
Financial Officer, Treasurer and Assistant Secretary of Healthcare.com since
July 1999. He previously served as Vice President - Controller, Chief Accounting
Officer and Assistant Treasurer of Healthcare.com from January 1999 through June
1999. Mr. Blankenship served as Corporate Controller of Decorative Home Accents,
Inc., a textile manufacturer, from October 1996 to December 1998, and as
Director of Accounting of Allegiant Physician Services, Inc., a healthcare
services company, from April 1994 to October 1996.

         Michael McGuire has served as Senior Vice President and Chief Operating
Officer of Healthcare.com since April 2000. He previously served as Senior Vice
President - Sales of Healthcare.com from March 1999 to March 2000. Prior to
joining Healthcare.com, Mr. McGuire was President of the Service Division of
Eclipsys Corporation, responsible for a $54 million healthcare service business
that included facilities management, remote processing, hardware maintenance,
network solutions, desktop services and consulting. From 1995 to 1997, Mr.
McGuire was President and CEO of National Healthtech, a wholly-owned subsidiary
of Affiliated Computer Services. Prior to that, Mr. McGuire spent 10 years in
various management roles at HBO & Company, including VP-Mainframe Sales,
VP-Outsourcing Services and VP-Quality.

         Shannon B. Hodges has served as Senior Vice President, Marketing of
Healthcare.com since December 1999. She previously served as Vice President -
Marketing of Healthcare.com from March 1998 to November 1999. Prior to joining
Healthcare.com, Ms. Hodges served as an independent healthcare software
consultant from June 1996 to March 1998; as Vice President of Product
Development for Nurse On Call from February 1992 to June 1996; as Vice President
of Nurse On Call from January 1990 to February 1992; and as Director of
Marketing for Labthermics Technologies, an IDE-stage medical device
manufacturer, from June 1986 to January 1990.

         Deborah L. Dean has served as Senior Vice President, e-Business since
December 1999. She previously served as Vice President - Research and
Development from February 1999 to November 1999. Ms. Dean joined Healthcare.com
when Healthcare.com acquired Criterion Health Systems, where Ms. Dean was
Vice-President of Research and Development since November 1994. Prior to joining
Healthcare.com, Ms. Dean was Director of Customer Services and subsequently Vice
President of Customer Services at Inforum/Medstat, Inc., a healthcare decision
support company, from November 1990 to November 1994. Prior to that Ms. Dean
spent 3 years at St. Bernard's Regional Medical Center in various Information
Systems roles.

         Leslie R. Jones has served as Senior Vice President, General Counsel
and Secretary of Healthcare.com Corporation since June 2000. Prior to joining
Healthcare.com, she served as Senior Vice President and General Counsel of
Charter Behavioral Health Systems, Of Counsel at the law firm of Troutman
Sanders, LLP, Vice President and General Counsel of Healthdyne Technologies, and
Vice President of Legal Affairs for Healthdyne, Inc.

         Lisa M. Maguire has served as Vice President, Controller, Chief
Accounting Officer, Assistant Treasurer and Assistant Secretary since December
1999. Prior to joining Healthcare.com, Ms. Maguire had 6 years of experience
with KPMG LLP, including manager from June 1998 to October 1999 in the
Information, Communication and Entertainment industry group, in which she served
mostly software and other high-tech clients.

         The section of the 2001 Proxy Statement captioned "Other Matters --
Section 16(a) Beneficial Ownership Reporting Compliance" is incorporated in this
Item 10 by reference.

ITEM 11. EXECUTIVE COMPENSATION

         The information in the section of the 2001 Proxy Statement captioned
"Executive Compensation and Other Information" is incorporated in this Item 11
by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information in the section of the 2001 Proxy Statement captioned
"Security Ownership of Certain Beneficial Owners and Management" is incorporated
in this Item 12 by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information in the section of the 2001 Proxy Statement captioned
"Certain Relationships and Related Transactions" is incorporated in this Item 13
by reference.


                                       40

<PAGE>   67

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a)(1) The following consolidated financial statements of the Company
and its subsidiaries and report of independent auditors thereon are included as
Pages F-1 through F-24 of this Annual Report on Form 10-K:

         Independent Auditors' Report

         Consolidated Balance Sheets - December 31, 2000 and 1999

         Consolidated Statements of Operations -
                  Years Ended December 31, 2000, 1999 and 1998

         Consolidated Statements of Shareholders' Equity -
                  Years Ended December 31, 2000, 1999 and 1998

         Consolidated Statements of Cash Flows -
                  Years Ended December 31, 2000, 1999 and 1998

         Notes to Consolidated Financial Statements

         (a)(2) The following supporting financial statement schedule and report
of independent auditors thereon are included as part of this Annual Report on
Form 10-K:

         Independent Auditors' Report

         Schedule II - Valuation and Qualifying Accounts

All other Schedules are omitted because the required information is inapplicable
or the information is presented in the Consolidated Financial Statements or
related notes.

         (a)(3)   Exhibits:

         Periodic reports, proxy statements and other information filed by
Healthcare.com with the Commission pursuant to the informational requirements of
the Exchange Act may be inspected and copied at the Commission's Public
Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549, and the public
may obtain information on the operation of the Public Reference Room by calling
the Commission at 1-800-SEC-0330. The Commission also maintains an Internet site
(http://www.sec.gov) that makes available reports, proxy statements and other
information regarding Healthcare.com. Healthcare.com's SEC file number reference
is Commission File No. 0-27056.

<TABLE>
<CAPTION>
Exhibit
Number                            Description
-------                          -------------
<S>      <C>

3.1      Amended and Restated Articles of Incorporation of Healthcare.com
         (formerly known as HIE) (filed as Exhibit 3(i) to the Company's
         Quarterly Report on Form 10-Q for
</TABLE>


                                       41

<PAGE>   68

<TABLE>
<S>      <C>
         the quarter ended September 30, 1999 (Commission File No. 0-27056), and
         incorporated herein by reference).

3.2      By-Laws of Healthcare.com (formerly known as HIE), as amended (filed as
         Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the
         quarter ended March 31, 1999 (Commission File No. 0-27056), and
         incorporated herein by reference).

4.1      Rights Agreement dated October 23, 1995 between Healthcare.com
         (formerly known as HIE) and SunTrust Bank (filed as Exhibit 4 to
         Amendment No. 1 to the Company's Registration Statement on Form S-1
         (Registration No. 33-96478), and incorporated herein by reference).

4.2      Form of Revised Subscription Agreement for Series B Preferred Stock
         (with Revised Annex I - Registration Rights) (filed as Exhibit 4.1 to
         the Company's Registration Statement on Form S-3 (Registration No.
         333-90849), and incorporated herein by reference).

10.1     Agreement and Plan of Merger dated May 12, 1998 by and among
         Healthcare.com (formerly known as HIE), HIE Acquisition Corporation,
         HUBLink, Inc. and Mark D. Shary (filed as Exhibit 2.1 to the Company's
         Current Report on Form 8-K dated May 12, 1998 (Commission File No.
         0-27056), and incorporated herein by reference).

10.2     Private Placement and Registration Rights Agreement dated as of May 12,
         1998 among Healthcare.com (formerly known as HIE) and each of the
         HUBLink Parties (filed as Exhibit 2.2 to the Company's Current Report
         on Form 8-K dated May 12, 1998 (Commission File No. 0-27056), and
         incorporated herein by reference).

10.3     Loan and Security Agreement dated August 3, 1998 between Healthcare.com
         (formerly known as HIE) and Silicon Valley Bank (filed as Exhibit 10.11
         to the Company's Annual Report on Form 10-K for the year ended December
         31, 1998 (Commission File No. 0-27056), and incorporated herein by
         reference).

10.4     Loan Modification Agreement dated November 13, 1998 between
         Healthcare.com (formerly known as HIE) and Silicon Valley Bank. (filed
         as Exhibit 10.12 to the Company's Annual Report on Form 10-K for the
         year ended December 31, 1998 (Commission File No. 0-27056), and
         incorporated herein by reference).

10.5     Value Added Marketing Agreement dated September 8, 1998 between
         Healthcare.com (formerly known as HIE) and HBO & Company of Georgia
         (Portions of this exhibit have been redacted and are subject to a
         confidential treatment request filed with the Secretary of the
         Commission pursuant to Rule 24b-2 under the Exchange Act. The redacted
         material was filed separately with the Commission.) (filed as Exhibit
         10.13 to the Company's Annual Report on Form 10-K for the year ended
         December 31, 1998 (Commission File No. 0-27056), and incorporated
         herein by reference).

10.6     First Amendment to Value Added Marketing Agreement dated March 3, 1999
         between Healthcare.com (formerly known as HIE) and HBO & Company of
         Georgia. (filed as Exhibit 10.14 to the Company's Annual Report on Form
         10-K for the year ended December 31, 1998 (Commission File No.
         0-27056), and incorporated herein by reference).
</TABLE>


                                      II-3

<PAGE>   69

<TABLE>
<S>      <C>
10.7     Second Loan Modification Agreement dated May 13, 1999 between
         Healthcare.com Corporation (formerly known as HIE), and Silicon Valley
         Bank (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K
         dated May 13, 1999 (Commission File No. 0-27056), and incorporated
         herein by reference).

10.8     Third Loan Modification Agreement dated August 2, 1999 between
         Healthcare.com (formerly known as HIE), Inc. and Silicon Valley Bank
         (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K
         dated May 13, 1999 (Commission File No. 0-27056), and incorporated
         herein by reference).

10.9     Fourth Loan Modification Agreement dated September 30, 1999 between
         Healthcare.com (formerly known as HIE) Corporation and Silicon Valley
         Bank (filed as Exhibit 10 to the Company's Quarterly Report on Form
         10-Q for the quarter ended September 30, 1999 (Commission File No.
         0-27056), and incorporated herein by reference).

10.10    Fifth Loan Modification Agreement dated November 30, 1999 between
         Healthcare.com (formerly known as HIE) Corporation and Silicon Valley
         Bank (filed as Exhibit 10 to the Company's Current Report on Form 8-K
         dated November 30, 1999 (Commission File No. 0-27056), and incorporated
         herein by reference).

10.11    Non-negotiable Convertible Term Note issued December 21, 1999 by
         Healthcare.com Corporation (formerly known as HIE, Inc.) to Cybear,
         Inc. (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K
         dated December 31, 1999 (Commission File No. 0-27056), and incorporated
         herein by reference).

10.12    Stock Purchase Warrant issued December 21, 1999 by Healthcare.com
         Corporation (formerly known as HIE, Inc.) to Cybear, Inc. (filed as
         Exhibit 10.2 to the Company's Current Report on Form 8-K dated December
         31, 1999 (Commission File No. 0-27056), and incorporated herein by
         reference).

10.13    Registration Rights Agreement dated December 21, 1999 between
         Healthcare.com Corporation (formerly known as HIE, Inc.) and Cybear,
         Inc. (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K
         dated December 31, 1999 (Commission File No. 0-27056), and incorporated
         herein by reference).

10.14    Amended and Restated Loan and Security Agreement dated December 31,
         1999 between Healthcare.com Corporation (formerly known as HIE, Inc.)
         and Silicon Valley Bank (filed as Exhibit 10.4 to the Company's Current
         Report on Form 8-K dated December 31, 1999 (Commission File No.
         0-27056), and incorporated herein by reference).

10.15    Accounts Receivable Financing Agreement dated February 24, 2000 between
         Healthcare.com Corporation (formerly known as HIE, Inc.) and Silicon
         Valley Bank (filed as Exhibit 10.1 to the Company's Current Report on
         Form 8-K dated February 24, 2000 (Commission File No. 0-27056), and
         incorporated herein by reference).

10.16    Stock Purchase Warrant dated February 24, 2000 issued by Healthcare.com
         Corporation (formerly known as HIE, Inc.) to Silicon Valley Bank (filed
         as Exhibit 10.2 to the Company's Current Report on Form 8-K dated
         February 24, 2000 (Commission File No. 0-27056), and incorporated
         herein by reference).
</TABLE>


                                      II-4

<PAGE>   70

<TABLE>
<S>      <C>
10.17    Asset Purchase Agreement dated March 13, 2000 between Thermo
         Information Solutions Inc. and Healthcare.com Corporation (formerly
         known as HIE, Inc.) (filed as Exhibit 2.1 to the Company's Current
         Report on Form 8-K dated March 13, 2000 (Commission File No. 0-27056),
         and incorporated herein by reference).

10.18    Common Stock Purchase Warrant dated March 13, 2000 issued by
         Healthcare.com Corporation (formerly known as HIE, Inc.) to Thermo
         Information Solutions Inc. (filed as Exhibit 2.2 to the Company's
         Current Report on Form 8-K dated March 13, 2000 (Commission File No.
         0-27056), and incorporated herein by reference).

10.19    Loan and Security Agreement dated December 20, 2000 between
         Healthcare.com Corporation and Silicon Valley Bank (filed as Exhibit
         10.1 to the Company's Current Report on Form 8-K dated December 20,
         2000 (Commission File No. 0-27056), and incorporated herein by
         reference).

10.20    Stock Purchase Warrant dated December 20, 2000 issued to Silicon Valley
         Bank (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K
         dated December 20, 2000 (Commission File No. 0-27056), and incorporated
         herein by reference).

10.21    Registration Rights Agreement dated December 20, 2000 between
         Healthcare.com Corporation and Silicon Valley Bank (filed as Exhibit
         10.3 to the Company's Current Report on Form 8-K dated December 20,
         2000 (Commission File No. 0-27056), and incorporated herein by
         reference).

10.22*   Amended and Restated Healthcare.com Corporation (formerly known as HIE,
         Inc.) Non-Employee Director Stock Option Plan (filed as Exhibit 10 to
         the Company's Quarterly Report on Form 10-Q for the quarter ended June
         30, 1999 (Commission File No. 0-27056), and incorporated herein by
         reference).

10.20*   Healthcare.com (formerly known as HIE) Adjustment Stock Option Plan
         (filed as Exhibit 10.5 to Amendment No. 1 to the Company's Registration
         Statement on Form S-1 (Registration No. 33-96478), and incorporated
         herein by reference).

10.21*   Healthcare.com (formerly known as HIE) Restated Stock Option Plan Two
         (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
         for the quarter ended March 31, 1998 (Commission File No. 0-27056), and
         incorporated herein by reference).

10.22*   Form of Agreement under Non-Employee Director Stock Option Plan (filed
         as Exhibit 10.20 to the Company's Annual Report on Form 10-K for the
         year ended December 31, 1997 (Commission File No. 0-27056), and
         incorporated herein by reference).
</TABLE>

11 Statement of Computation of Per Share Earnings (Loss).


23 Consent of KPMG LLP.


                                      II-5

<PAGE>   71

---------------

*        Management contract or compensatory plan or arrangement required to be
         filed as an exhibit pursuant to Item 14(c) of Form 10-K.

         (b)      Reports on Form 8-K:

         During the quarter ended December 31, 2000, the Company filed a current
report on Form 8-K dated December 20, 2000, reporting under Item 5 thereof a new
credit facility entered into with Silicon Valley Bank.


                                      II-6

<PAGE>   72

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                   Healthcare.com Corporation



                                   By:  /s/ Robert I. Murrie
                                      ------------------------------------------
                                      Robert I. Murrie
                                      President and Chief Executive Officer
                                      (Principal Executive Officer)

March 28, 2001

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
       SIGNATURE                                  TITLE                                   DATE
--------------------------     ------------------------------------------------       --------------
<S>                            <C>                                                    <C>
/s/ Parker H. Petit
--------------------------
Parker H. Petit                Chairman of the Board of Directors                     March 28, 2001



/s/ Robert I. Murrie
--------------------------
Robert I. Murrie               Director, President and Chief Executive Officer        March 28, 2001
                               (Principal Executive Officer)

/s/ Joseph A. Blankenship
--------------------------
Joseph A. Blankenship          Senior Vice President, Chief Financial                 March 28, 2001
                               Officer, Treasurer and Assistant Secretary
                               (Principal Financial Officer)
/s/ Lisa M. Maguire
--------------------------
Lisa M. Maguire                Vice President - Controller, Chief Accounting          March 28, 2001
                               Officer, Assistant Treasurer and Assistant
                               Secretary (Principal Accounting Officer)

</TABLE>
<PAGE>   73

<TABLE>
<S>                                     <C>                                           <C>
/s/ Joseph G. Bleser
---------------------------
Joseph G. Bleser                       Director                                      March 28, 2001


/s/ William J. Gresham, Jr.
---------------------------
William J. Gresham, Jr.                Director                                      March 28, 2001


/s/ Charles R. Hatcher, Jr.
---------------------------
Charles R. Hatcher, Jr.                 Director                                     March 28, 2001


/s/ John W. Lawless
---------------------------
John W. Lawless                         Director                                     March 28, 2001


/s/ Carl E. Sanders
---------------------------
Carl E. Sanders                         Director                                     March 28, 2001


/s/ Donald W. Weber
---------------------------
Donald W. Weber                         Director                                     March 28, 2001
</TABLE>


<PAGE>   74

                          Independent Auditors' Report

The Board of Directors and Shareholders
Healthcare.com Corporation

         Under date of January 19, 2001, except as to note 15, which is as of
January 25, 2001, we reported on the consolidated balance sheets of
Healthcare.com Corporation and subsidiaries as of December 31, 2000 and 1999,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
2000, as contained in the annual report on Form 10-K for the year 2000. In
connection with our audits of the aforementioned consolidated financial
statements, we also audited the related consolidated financial statement
schedule as listed in the accompanying index. This financial statement schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion on this financial statement schedule based on our audits.

         In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.


                                                      /s/ KPMG LLP
                                                      -----------------------


Atlanta, Georgia
January 19, 2001


<PAGE>   75

                                                                     SCHEDULE II


                   HEALTHCARE.COM CORPORATION AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                 (In thousands)


<TABLE>
<CAPTION>
                                          Balance                                                         Balance
                                            at           Charged to                                          at
                                         Beginning       Costs and          Other                          End of
                                         of Period        Expenses        Additions       Deductions       Period
                                         ---------       ----------      -----------      ----------     ---------
<S>                                      <C>             <C>             <C>              <C>            <C>
Allowance for Doubtful Accounts:

Year Ended December 31, 1998              $  626           $  270            $ --            $  176         $  720

Year Ended December 31, 1999              $  720           $5,195            $250*           $1,005         $5,160

Year Ended December 31, 2000              $5,160           $1,200            $ --            $1,065         $5,295
</TABLE>


* Allowance for doubtful accounts relating to certain fully reserved accounts
  receivable repurchased in connection with the sale of Integrated Services
  Group to Superior Consultant Holdings, Inc.